Hope this video finds you well.
This past weekend I had a conversation with my 15 year old son who got his first job, and I thought some of this might be really good on LinkedIn. So I want to share with you why I feel it’s really important to start your financial planning when you’re young.
So some of those benefits I shared with my son and the first one, which I think is probably the most important, is that it creates a habit, the habit of paying yourself first. So I shared with him that I think he should create, much like I do with our bills, create a budget and create a certain dollar amount, whether that’s a percentage or a flat dollar amount that you can afford to set aside for your nest egg. Hopefully that habit of paying yourself first will last your lifetime.
So that was advice number one, and he understood that,and that made a lot of sense to him. But number two was the time value of money. And I went through the exercise of sharing with him how much money can earn for you without you earning it on your own. He really enjoyed that concept because my kid doesn’t like to work. And so he understood that the more he has and the more interest he can earn, the more the money works for him instead of him doing it with his own hands. He loved that idea. So the concept of time value of money.
The third thing is your health. Whether you have fantastic family history or super long longevity, none of us can guarantee that we’ll be healthy enough to work in the future. And so if you can afford to put things aside now, you’ll have the ability to God forbid, if you can’t work have that nest egg. It could help. Whether it’s an accident, whether it’s just a flat tire, having a little bit of a nest egg allows you to take advantage of those opportunities when you’re in time of need. And finally, when you’re young, you have a lot less responsibilities. And when you get a little bit older, so you have far fewer things you’re paying for. So start when you’re young.
And hopefully you can keep that habit of paying yourself first. So just a few ideas about the reasons why it pays. Yes, it pays to start your financial planning when you’re young.
Hope that helps. Take care.