Launching the Younger Generation to Financial Success

There are many personal finance activities that we engage in as adults that are almost second nature, from working to saving to borrowing and building credit. We’ve compiled some simple actions you can take (and when) to increase your child’s financial success as they mature.

Grade School Age +
1. Encourage them to get experience with a job (in or outside the house)
> Let children get experience managing their own cash flow – learning about how much money comes in (and when), how to spend wisely, and how to save for future expenses both large and small.

Junior High/High School Age
1. Help them open their own checking & savings account (& obtain a debit card)
> In addition to learning about how to manage money with a bank, this is a critical step before engaging in any future lending.
> Provide experience for managing money the way most of us do today (digitally).

2. Open a secured credit card (or make them an authorized user on your card) – build credit!
> Building credit is an often-overlooked aspect of setting young people up for financial success.
> A secured credit card allows you to build your credit with significant guardrails in place
– Allows for building credit with very low (and secured) credit limits
– Available to people with poor or no credit
> To start, authorizing a child as a user on your card may be a good way to allow them to learn to make purchases, build & manage credit, while still allowing you to monitor their spending and ensure their success.

3. Go through a tax return with your teen
> At school, kids learn a lot – however, as you may have experienced in your own life, the intricacies of a tax return is not one of them. Help your younger generation understand what taxes they are paying & why.

College Age
1. Understand the difference between “good” debt & “bad” debt
> With credit, comes the need to discern how to use credit wisely. Teaching young people the difference between high interest rate credit cards, auto loans, and federal/private education loans is critical to making informed decisions about debt.
> Review the costs and benefits of particular schools & majors when determining when (and how much) to borrow for school – it’s critically important as college costs & student loan debt continues to balloon.

2. Take them to a meeting with your financial advisor
> Be open about your financial journey & allow them to learn from your successes & failures.
> Make the most of the resources available to you – we would be more than happy to help be a part of your young person’s financial success.

Raising Financially Sound Kids

The vast majority of children are destined for a financial future that differs little from that of their parents. Research has found that the financial future of younger generations can sometimes even be worse due to a combination of societal influence and last of intentional “fiscal training”.

You can change that.

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The Boomerang Generation – Planning for the Unplanned

Nearly double the number of 25- to 35- year-old Millennials were living with their parents in 2016 than their Silent Generation counterparts in 1964.1 In fact, the percentage of 18- to 34-year-olds living in their parents’ home grew from 26.0% in 2005 to 34.1% only ten years later. Of this group, 1 in 4 are idle, meaning that they neither go to school nor work.2 These young adults are known as the “Boomerang Generation”. When they boomerang back to their parents’ home, it is often unplanned and can create financial, emotional, and relationship strain. But…with a bit of creative planning, the recipient of the boomerang can help their young adult without sacrificing their financial future.

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Sharon Allen’s article published by Financial Advisor Magazine

Financial Advisor Magazine, a national publication serving the advisory community, published an article written by Sharon Allen on understanding the squeeze a sandwich generation woman experiences and how advisors can help. Check out the full article here https://swmi.co/fa-sangen. To read her full white paper “Caught in the Middle: How Does the Sandwich Generation Woman Not Get Squeezed?”, see the Resources section of our website here.

Sandwich Generation Woman

Sandwich Generation Woman

Allen Addresses Advisers on Working with Breadwinner Women

This May Sharon Allen spoke at the national Financial Advisor Invest in Women conference in Dallas, Texas. She facilitated a panel of experts as well as shared her own expertise regarding the concerns and needs of Breadwinner Women in our society. Drawing from the national research from the Family Wealth Advisor’s Council, of which Sharon is a member, she focused on the resulting data highlighting the challenges and opportunities financial advisors need to be aware of when serving women investors. “I was honored to be asked to be a part of the conversation around this very important topic,” says Allen. “Despite a growing awareness of differences in the needs of women, our research shows that the financial services industry still needs to do a much better job in truly partnering with women investors.”

Sharon Allen, CFP(R), CTFA is the Co-Founder and President of Sterling Wealth Management, a fee-only wealth management firm. She has an exceptionally collaborative approach in working with her clients, and has a particular interest in the challenges facing women of wealth. Sharon has co-authored a paper on the Sandwich Generation Woman titled Caught In the Middle: How Does the Sandwich Generation Woman Not Get Squeezed?.