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Friday, 7 December, 2007 11:20 AM
Teaching Teens How To Gain Financial
Freedom
7 tips you can use
now to secure financial future for your children
In an age when foreclosures
are at a record pace, credit card debt is hitting new highs and
personal savings are at an all time low, millions of American families
are worried about their children’s future. While they’d
like to teach their kids about finances, the sad truth is many parents
are not skilled enough with their own money to offer solid guidance.
And financial literacy - a skill young people desperately need -
isn’t taught in high school.
That’s where Vince Shorb comes in. A self-made millionaire
at age 32 and creator of the interactive multi-media course “Financially
Free by 30,” Shorb is a young adult financial literacy advocate
and expert. His goal is to teach teens and young adults how to avoid
the ever-growing pitfalls of racking up debt by empowering them
with the knowledge to become financially self-sufficient.
“Polls show that students, ages 15-21, feel unprepared to
face the complex world of the 21st century,” says Shorb. “Most
education efforts are focused on encouraging high school students
to enroll in college instead of how to manage their future finances.
The sad part is that all that misdirected preparation results in
a third of these students ending up with a bachelor’s degree
and the average college grad having over $20,000 in debt.”
Shorb offers 7 basic tips that you can share with your children
in order to start them off on the path to financial freedom:
1. Learn to distinguish needs vs. wants. To counter the lifelong
effects of advertising it is important you distinguish the difference
between a need and want. A need is something you must have (like
food, shelter and clothing). A want is something you would like
to have that’s not a necessity such as designer clothes or
an iPod. When you have enough savings to cover your needs, then
you can focus on your wants.
2. Ditch costly everyday habits. A four dollar coffee five days
a week equals more than $1,000 a year. Suggest they write down their
everyday expenses, what Shorb calls the ‘money diary’
exercise. It’s a great way to show them how even the smallest
expenditure can add up!
3. Develop a savings plan. Help your child compare what they make
in a month verses how much they spend in a month. Then using this
information, construct a monthly budget to help them start saving!
Shorb says with simple investments and saving $250 a month they
could be a millionaire by age 40.
4. Pay yourself first. With the average American spending beyond
their means, teach your child to be a money rebel and not do what
the average person is doing. It will seem tough to see the benefit
of this at first, but if they automatically deposit a percentage
of their paycheck into a savings account, they won’t miss
it! As you know, a savings plan is the cornerstone for financial
freedom.
5. Get Your Accounts in Order! At a bare minimum, young people should
open 1 checking account and 2 savings accounts. Of the two savings
accounts, one should be used for long term planning and the other
for their fun money – things they want to do now. Shorb finds
that young people that are able to set up and adequately manage
these accounts gain the ability to not only save more but also learn
some investment basics.
6. Start investing now. It is never too early to benefit from investments!
Young people can make simple investments having little to no knowledge
of the stock markets. Shorb says the S&P 500 Index could make
a sound investment for young investors. It gives them the opportunity
to own a little piece of 500 different companies. This will show
them that investing is easy while lowering the risk and delivering
consistent returns!
7. Write out your lifestyle goals. Young people are not motivated
by money it’s what money allows them to do. Places they want
to travel, toys they want to have and how they can make a positive
impact in the world…Find out the type of lifestyle your child
wants to live and help them find out what they need to achieve them.
Have them be as specific as possible, including how much money they
need to make every month to meet their savings and lifestyle goals.
There is nothing worse than seeing your child in their mid-twenties,
toiling in more debt than you ever did at that age. By taking a
proactive approach as a parent, you can have an instrumental role
in providing a brighter future for your child. Shorb believes that
if you can pass the above financial tips onto your children, and
show them how to apply them to their everyday life, they will not
only be able to start building a financially secure future, but
escape shackles of life long debt.
ABOUT VINCE SHORB
Vince Shorb, founder and president of NEW-GEN MEDIA, is dedicated
to providing practical financial education for young people. Broke
at the age of 26, in just six years he made his first million. He
spent several years as one of the nation’s most productive
loan officers and has reviewed the finances of over 10,000 clients.
His diverse financial expertise includes real estate, the stock
market, credit, money management, entrepreneurship and personal
growth.
As the leading young adult financial literacy advocate and expert,
he’s created a charity, “No Teenager Left Behind,”
which donates one course (for each one sold) to a disadvantaged
youth.
Source: News and
Experts
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