18 / Getting Married
Question: I just gave birth to a beautiful baby. I’m interested in securing his financial future to the best of my ability. What steps should I take?
Answer: Save $10,000 on behalf of the baby within the next few years. You don’t have to put it in an educational fund, in fact it may make more sense to have it somewhere more accessible in case of emergency. Just earmark the money for the child, and you have a good chance of funding not only their schooling, but a good portion of their retirement. Giving them an extra twenty years or so of investing will go a long way toward improving their future.
Question: I have a child who is almost 18 and he is having trouble understanding how to financially plan the next couple of years. Any advice?
Answer: I don’t suggest that every 18 year old move out. Sometimes that is a bad decision for people who may not be mature enough to handle the challenges involved. However, make sure that he begins to pay some of his own bills. Gas, eating out, and basic insurance needs should be covered by someone that age. Make sure that he understands that he needs to be creating his own cash flow. That is something that eludes some 18 year olds. Once you’re an adult, unless you’re a full time college student, you should be out in the workforce creating your own path.
Question: I’m finding myself drowning in student loan debt. I went to multiple schools, but was unable to secure my bachelor’s degree. Now I’m unsure how to pay all my lenders back.
Answer: In the past it was easy to declare bankruptcy and start fresh, but those restrictions have been tightened. Unfortunately your options are somewhat limited in this respect. Reduce your living expenses as much as possible (even boarding with mom and dad if necessary) and avoid owning a car and all the expenses that come along with it. Odds are your student loan payments will be under $1,000, so a few years of working will allow you to wipe out your debt, since your income should be roughly two or three times that.
Question: My fiancé has completely different ideas regarding the financial aspects of our wedding. Who should decide what?
Answer: It’s important for both of you to get what you want out of your wedding. At the same time, there are realities that may not have occurred to you yet, and it’s important to keep them in mind. Will you be buying a car soon after your marriage? A house? Are there student loans that will need some attention? If any of that is true, then your stance regarding your wedding choices need to be more conservative than you might have originally planned. You’ll notice over the course of your life together that conservative fiscal choices will typically serve you better than increased spending. If one of you is skilled in the art of investing and finance, it’s best to let them take the lead when it comes to how much to spend on big ticket items.
Question: How do I keep my wedding budget under control?
Answer: The only way to keep your wedding carefully organized is through a qualified wedding planner. They will help you keep everything on schedule and under budget. Even if you think that you know what you want and how much you can spend, there are so many nuances in the wedding process that can overwhelm you. Take advantage of an affordable planner and watch how you will save 20% to 30% off the total cost of your wedding. Also make sure that you have full knowledge of any money that your parents might be providing. It helps to know ahead of time how much they are providing.
Question: What is the most important thing to do after turning 18?
Answer: Visit a financial advisor because everyone has a different situation and quality guidance is key to making the most of your opportunity. Some people are going to college and some are not. Maybe you need to figure out a different housing situation, or you need help working out a student loan. For some people it makes sense to get a part-time or full-time job, but others need to focus on different goals such as sports or other endeavors. Talk to your financial advisor and develop an investment schedule for any money that you have and any money you might be earning. It is a very smart move to align your investments right when you become an adult because the gains you can make in the next few years alone are worth the visit. The power of compounding can help your money work for you, and not the other way around!
Question: How dangerous is college debt? How easy is it to actually pay off?
Answer: Well, that is a tough question to answer. No one really knows what direction your life will take after college, or during college for that matter. People often validate huge college expenses by telling themselves that their career will produce a certain amount of dollars, but that doesn’t always happen. Sometimes people decide that they want to work in a different field than what they majored in. Sometimes other life obstacles occur, possibly involving family, legal, or medical expenses. It’s best to ask yourself if the quality of your education is within a reasonable scope. There are lots of people out there that are never able to pay back their student loan, or are forced to declare bankruptcy because of it. Make sure you keep your perspective conservative. Shoot for the stars, but make sure they’re not in another solar system.
Question: I'm 18. What is the best thing to do in order to secure my financial future?
Answer: Go to college. It has been proven that college graduates on average make much more money and retire with a higher net worth than those without a four year degree.
