| Hi Taylor:
I've got two kids in college and I'm excited about their future careers
but nervous about how they'll manage their money. Any tips I can pass
their way? - Sydney
Hi Sydney: So. Many. Tips. Understanding how to make, save, and
spend money is invaluable for anyone transitioning from a carefree
teen to a responsible adult. Most lessons are learned through experience,
but preparing your adult children for those experiences is what can
make all the difference.
There's good debt and bad debt, but people have to earn the privilege
of messing around with good debt. It's a rare 20-year-old who
can take out a loan to start a business or become a property owner,
so one of the best pieces of advice you can give is to avoid credit
card debt like the plague. The average person in their early 20s
has about 10K in debt, and every dollar owed is one that's not
earning interest or doing anything proactive. Again, people typically
learn the hard way when it comes to paying interest. If you're
able to make your kids understand how bad debt holds a person
back, you might save them years of financial struggles.
People budget to varying degrees, with some tracking every
penny and others dividing their funds into a few general categories.
My ideal budget has 10% going to tithes/charity, 10% going to
investments, 10-20% going to debt or other savings goals, and
the rest covering the many expenses life throws your way. You
might not be able to get a college student to commit to this kind
of structure right away, but teaching them to keep multiple financial
balls in the air will prepare them for long-term success. Otherwise,
they'll put all their earnings toward one shiny object and hamstring
their spending power in a big way.
3. Investing isn't just for older people. It seems so boring
when you're at the end of high school or the beginning of college.
Buy stocks instead of going on a ski trip with friends? No way!
Meanwhile, if a 19-year-old starts investing $50 a month, that
money will keep compounding, without ever bumping the investment
amount up from $50 (hopefully the investment amount will go up
over time)! The point is, the earlier you start investing, the
| It's hard to
make people understand patience and strategy when they haven't had
a chance to learn these things practically. At the same time, discussing
these broader topics and leading by example can help a young adult
make better decisions than someone with zero guidance. Hope this helps!
© Taylor Kovar
July 6, 2022
More "Go Far With Kovar"
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.