Home » Blogs » Evan_Bedel's blog

This Article Makes Me Sound Old

Submitted by Evan_Bedel on Thu, 04/01/2010 - 2:51pm

The great philosopher Chris Rock once said, “Nothing shouts ‘temporarily rich’ more than a house full of plasma televisions and a garage full of luxury cars. Ask Rick James or MC Hammer if I’m lying about the danger of living paycheck to paycheck”. So what’s Chris Rock really trying to say? I think it’s a combination of things. Let’s stop spending all of our money on assets which depreciate over time, and maybe we shouldn’t live every day like it’s our last (financially speaking) and actually start preparing for our financial futures. 

When I talk to my generation about money and finances, I let them know a few simple facts. When the government—controlled by any political party—goes into debt, someone else has to pay it back. When you go into debt, not only do YOU have to pay it back, but the interest you must pay to credit card companies can crush you financially. In other words, you should avoid personal debt at all costs. Don’t live paycheck-to-paycheck. And, set up an emergency fund for those pouring down rainy days. 

Each generation is living longer than the last, and it’s beginning to look like government-supported retirement programs such as Social Security won’t be a guaranteed paycheck for us. That means it’s more important than ever for you to begin preparing for your retirement now. I know, it’s not something you want to think about right now, but as life expectancy increases you could feasibly be retired before you face your mid-life crisis! If you start working at age 22 and retire at age 62, you still have 30 years without income to support your ongoing lifestyle. As I see it, you have two options: Start preparing for your financial future now, or continue working into your late 70s.

You need to understand the importance of saving for unexpected events as well as saving for the future. The best way to take control of your financial life is by making savings a priority. When you begin working with a financial planner, whether it’s me or someone else, you need to make sure they’re a CERTIFIED FINANCIAL PLANNER™. You should talk with a CFP® practitioner about opening up a Roth or Traditional IRA and making direct deposits from your checking account into this retirement vehicle every time you receive a paycheck. Don’t give yourself the chance to spend the money; save it before you even know it’s there. Remember, you don’t need a $50,000 car, which depreciates in value once you take it off the lot, when a $20,000 car will do. All I want is for our generation to be more fiscally responsible than the last. I probably need to stop sounding like your parents, but just like them, I want what’s best for you.

Please share with me and others some of your financial ideas and questions.  We can learn from each other!  Thanks.

»