When explaining the value of financial planning to my family and/or friends, would begin by explaining the importance of having security blankets to fall back on if something tragic were to happen in your life where you would all of a sudden need money, for instance; losing a job, medical emergency where insurance only covers a little bit or waiting for the result of a lawsuit. Also, would explain the importance of living below your means, but not within your needs.
When my son turned five, we started having him do chores so he could earn an allowance to learn how to earn the money you need to buy the things that you want. With that, of course, comes saving your money if you do not have enough to buy the thing that you want. There are two topics that I believe are the most important for adults to know and understand. The first of the two topics is credit cards/credit card debt.
I do not have credit cards and I grew up in a family that believed that if you do not have the money to ay whatever it was that you wanted, you did not need it until you saved that money up. My family-as far back as I can remember-never believed in credit cards, or even credit for that matter. The second topic that is most important for adults to understand is the difference between Roth Aria’s and 401 KS. It is important to understand what your work will contribute, how long it takes to mature and what is the penalty rate if you were to prematurely take money UT of your 401 K.
Of course my financial habits have changed over the last five weeks of this course! Find myself trying to budget better, am not as frivolous with my money as I was before, and have cut a lot of useless things out of my budget that do not need to spend my money on. Also, I am in the process of having a certain amount of money taken out of my paycheck each pay period and put into a separate account so that am able to save money; out of sight, out of mind!