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  Teach Your Children Well    

College Grads, Finances & The Real World

 

Dear Friend,Catherine Head Shot
    

     Spring fever is in the air!   I am noticing it in my two boys, and especially my oldest who graduates from middle school in June!

 

     Of recent it seems that many of my clients are at that stage where their children are graduating college and starting their first job. Which brings us to this month's newsletter topic.

 

   One of the services CAIM provides clients is helping to educate the next generation about investing. It's important, not only because it helps them begin saving towards their retirement, but also because it grounds them as they learn to see how and where to allocate their money on a daily basis.

 

   Today's newsletter offers some guidelines to help young adults transition to becoming financially independent.

 

    As always, we look forward to hearing from you if you have any questions.

 

Warm regards, 

 Signature

Catherine Maniscalco Avery

 

The backbone of CAIM is to employ a classic long term investment strategy including dividend paying stocks. CAIM is an independent, women owned investment management firm specializing in managing investment portfolios for women and baby boomers.

203.966.2712  p
203.966.5697  f 



May 26, 2015|  Issue No. 62
In This Issue
Teach Your Children Well
Be Wiser w/ Emotions & Money
Dividend Champs 1/4 2015
Quick Links
Find Out More
Call me at 203.966.2712
or visit www.caimllc.com.

 


Teach Your Children Well 

College Grads, Finances & The Real World 

You've gotten them through college and your graduates are all set to begin living and working as responsible adults in the real world.   Right?

Hold on a minute.   Are they really ready?  Amy Von Tobel, 30 year old certified financial planner, founder and CEO of LearnVest, a personal finance website, notes that ignorance about how to save and how to invest is rampant - particularly among the younger generation. 

In her new, do-it-yourself book: Financially Fearless, von Tobel offers practical, inexpensive guidance for young adults just entering the work force.

This might be an opportune moment to go over some of these basic financial guidelines with your graduates. It may help ensure they get off on the right foot as they begin earning a paycheck.

  

Let's take a look at the top 20 financial habits von Tobel recommends trying to avoid:  

  1. Not budgeting
  2. Not asking for a raise when you deserve it
  3. Carrying a credit card balance month to month
  4. Being reckless with personal information i.e. social security number etc.
  5. Dipping into an emergency fund for non emergencies
  6. Not saving a set amount automatically out of every paycheck
  7. Assuming you're too young or old to invest
  8. Paying bills by snail mail
  9. Making late payments
  10. Not knowing your credit score
  11. Borrowing money from friends and family
  12. Keeping all your money in a checking account
  13. Living beyond your means (most commonly spending too much on housing)
  14. Trying to keep up with the Joneses when you can't afford to
  15. Avoiding writing a will
  16. Impulse shopping
  17. Not having enough or the right insurance: health, life, renter's, homeowners, automobiles etc.
  18. Not taking advantage of employer benefits such as 401(k), matching or a flexbile spending accout
  19. Ignoring your student loans
  20. Taking money out of retirement

An exhaustive and possibly overwhelming list, we agree. It's probably a good idea to begin with a few pointers at a time.   At CAIM we might advise making the following four the initial priorities:

   

1. Not taking advantage of employer benefits such as 401(k) matching or a flexible spending account.  If you are a regular reader of our newsletter, you will know how strongly we feel about saving for retirement.   If they do nothing else right now, this will be the single most important way your young adults begin saving.

  

2. Not budgeting.  Von Tobel's bare bones budgeting format for all wage earners is as follows: 50% of take home pay goes to essentials (and of that 50% you shouldn't spend more than 30% on your rent, 10% on your groceries and 10% on other essentials), 20% of take home pay should be saved and the remaining 30% is for you to use as you choose. Now that's a budget!

3. Carrying a credit card balance month to month. The biggest money problem for young people, according to von Tobel? Credit card debt. Before any real savings can begin, she advises that all credit card debt must be paid off.   By hook or by crook it's an imperative.

 

4. Impulse shopping. Von Tobel doesn't want to advise readers what to buy, but she does want to help them think about why they're buying something.   For example, how long did you really enjoy that extra drink at dinner, or all those clothes you never wore?   Impulse shopping can be a hard concept to grasp right away - especially for younger people. It's more of a learned behavior than a concrete step. It may need to be something that's broached over time, until a gradual understanding of cause/effect kicks in.

 

The bottom line is this: thinking rich alone isn't going to cut it. It takes practical, informed steps, as well as learned behavior, to achieve real financial freedom.

As parents we can continue to be a good sounding board for our kids as best we can - that's if they'll take our advice!

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Be Wiser - With Your Emotions & Your Money

The topic of money can be an emotional one.   According to Liz Weston, in a February 2015 online article titled; "From Guilt to Sadness - How Emotions Affect Money Habits," recent research shows that ... Read more 

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Dividend Champs 1st Quarter 2015 

We have barely made it through the first quarter of 2015 and dividend increases have already been abundant for the companies we own ... Read more 
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Disclaimer: NO CONTENT PUBLISHED AS PART OF THE CAIM LLC NEWSLETTER CONSTITUTES A RECOMMENDATION THAT ANY PARTICULAR INVESTMENT, SECURITY, PORTFOLIO OF SECURITIES, TRANSACTION OR INVESTMENT STRATEGY IS SUITABLE FOR ANY SPECIFIC PERSON.  TO THE EXTENT ANY OF THE CONTENT PUBLISHED AS PART OF THE BLOG MAY BE DEEMED TO BE INVESTMENT ADVICE, SUCH INFORMATION IS IMPERSONAL AND MAY NOT NECESSARILY MEET THE OBJECTIVES OR NEEDS OF ANY SPECIFIC INDIVIDUAL OR ACCOUNT, OR BE SUITABLE ADVICE FOR ANY PARTICULAR READER.  EACH READER AGREES AND ACKNOWLEDGES THAT ANY SPECIFIC ADVICE OR INVESTMENT DISCUSSED IN THE BLOG MUST BE INDEPENDENTLY EVALUATED BY THE READER AND HIS OR HER ADVISER IN VIEW OF THE READER'S INVESTMENT NEEDS AND OBJECTIVES.
 

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