It’s Never Too Early to Start Saving

With September 8^th being International Literacy Day, it is important to discuss financial literacy, which I believe makes all the difference in the world for a financial future to start and stay on the right path. Here are three financial literacy tips that I have applied to my own children as well as with the college students I teach and the at-risk youth I mentor through the "I Believe in Me" program.

1. Start early. Establish a saving system at a young age and prioritize paying yourself. For young kids, help them enroll in a savings account at a local bank or a mutual fund and encourage them to make deposits when they can - birthdays, allowance money, special occasions. For my students who have jobs, I recommend they consider a Roth IRA and that they make systematic monthly payments to it. They will receive tax-free growth over their life the funds are used in retirement.

1. Avoid debt if possible. One of the biggest mistakes I see young people making is mis-using their credit cards. It's important to make sure that you understand how credit cards work and that you use them responsibly. It is easy to impulse buy, especially if your credit card is linked to online shopping accounts - just one click to buy! I've always told my kids and now my students that before buying anything of significance, step away. Come back the next day and revisit the purchase to determine if it's a necessity, a priority, and whether you can afford it within your current budget or the money you have right now in the bank. If you do need to go into debt, and for many that's inevitable with the cost of education, it's important to create a plan to get out. Set a budget, cut unneeded expenses, and prioritize choices to escape debt as quickly as you can.

1. Set measurable short, medium, and long-term goals. Goals are so important for everything in life, but particularly when it comes to your finances. You can't just set them and forget them; check-in and adjust your goals as needed. A financial professional can help you, and there are also plenty of free tools and resources online that can help you create a financial plan for yourself, even from a young age. But most importantly, be sure to hold yourself accountable.

Financial literacy does not have to be intimidating or complicated. It's important that we have the conversations about money and savings with kids at an early age and encourage good behaviors when it comes to money. From a young age, you can take these three simple steps to create a successful financial future for many years to come.

Brad W. Young CFP®, CTFA, is the president and CEO of Maryland Financial Planners, Ltd, (MFP) and a registered representative of Lincoln Financial Advisors (LFA), broker/dealer. Young has a passion for educating youth about financial literacy. He currently serves as the president of the Board of Frederick County Public Schools, an adjunct professor at Mount St. Mary's University and a board member for "I Believe in Me," a mentoring program for at-risk youth which provides after-school educational programs, recreation, and mentorship to 40 children. Young and the I Believe in Me organization were both recently recognized with awards in community service by Invest in Others Charitable Foundation.

LCN-3740856-083121