As family and friends gather for Thanksgiving, you may find yourself at the same table as young adults who are just starting out in their financial journey. If you’re a parent or grandparent looking to share financial advice with a young family member while you have their attention – and their appetite – there are a few important early steps people in their 20s can take to create healthy financial habits that will last a lifetime. After all, it’s never too early to begin thinking about and establishing a solid foundation for one’s financial future. While you’re passing the turkey and pumpkin pie, you might consider passing along the following financial tips.
Important considerations at this stage include building good credit, establishing a budget (and sticking to it) and beginning to save for retirement. By getting started when they’re young, they can be better prepared for when the stakes are higher later in life.
Here are a few additional tips you can share about beginning the financial planning process:
- Review any debt to develop a payment strategy.
- Keeping strong credit building in mind.
- Get smart about tax planning, in order to save for retirement and reduce taxes while your earning potential grows.
- Secure proper levels of insurance coverage – including medical insurance, renter’s or homeowner’s insurance, disability insurance and life insurance – to prepare for any unexpected expenses.
Finally, while it’s not the most lighthearted dinner conversation, you might even share with your younger relatives that it’s never too early to begin an estate plan with a health care directive. They’d be wise to determine if they need a will and Power of Attorney, particularly if they are planning to get married and start a family in the near future. This will ensure they and their heirs are well protected in the event of a tragedy.
Learn more about financial preparation in one’s 20s by downloading our comprehensive checklist.
PLEASE NOTE: JNBA is not an insurance agent, attorney, nor account. No portion of the mentioned checklist should be construed as insurance, legal, or accounting advice. All insurance, legal, and accounting issues should be discussed with the insurance, legal, and accounting professionals of your choosing.
Please see important disclosure information at www.jnba.com/disclosure
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, Inc.