Every generation has their own ways when it comes to money.Whether it was our parents stashing cash in their bedroom mattresses, or our great grandparents balking at investing after the Great Depression, generational events help mold how we manage our lives. If your goal is avoiding many of the financial pitfalls your parents fell into, you should strive to learn positive money habits while unlearning any lessons that stifle wealth. Here are a few of those habits.
Diversify Your Investments:-
Many people from the older generation have a narrow view of what it means to invest. Unfortunately, they tend to believe their way is the best way – even if it’s not the best way for their kids.”If the parents are risk averse, they tell their kids to save their money in bank CDs, pay down debt, and avoid things like equities,” said financial adviser Joseph A. Azzopardi of The Well Planned Retirement. “If the family’s wealth was primarily made in private business, they encourage their children to focus their capital on business ownership.”While many of these strategies can be successful when it comes to building wealth, there is no single best strategy. That’s why Azzopardi and many other advisers suggest their clients diversify instead of putting all their eggs in one basket.
Learn Basic Financial Education Early:-
In many families, the topic of money has always been taboo. You don’t speak of it because it’s “rude,” or because it’s an adult topic that shouldn’t be discussed with the kids. But, not talking about money can be devastating for young people who reach adulthood without basic financial knowledge. Because of this, most financial advisers agree today’s parents should teach their kids money basics like budgeting and how to manage credit scores.”Let’s face it, it almost completely falls on the parents to be the money professor since it’s rarely touched upon in our education system,” said Kansas City Financial Planner Clint Haynes. If you don’t teach your kids about money, you can expect them to learn their lessons the hard way.
Plan for a Lengthy Retirement:-
These days, people are living significantly longer. For the younger generation, that means we need to save up more cash to retire.”As life expectancy continues to grow, present and future retirees will need to plan for a retirement that could span the course of several decades,” said Seattle Financial adviser Josh Brein. Whether you sit down with a financial adviser or plan your investments yourself, make sure you’re planning for a lengthy and expensive retirement. According to the Social Security Administration, men and women who reach the age of 65 can expect to live until ages 84.3 and 86.6, respectively.