The year is 2029. The Chicago Cubs finally ended their 120 year World Series drought with a stunning game 7 victory over the Red Sox, who were trying to win the Fall Classic for the 12th straight year. The first Hydrogen-Flying Vehicle hit the skies in March of this year, Will Ferrell recently won an Oscar for Best Actor and your first child is graduating from high school and hopes to attend college in September. Life is great. You are less than 5 years from retirement but suddenly realize that little Billy needs some money for his degree. The personal finance basics you wished you followed years ago are leaving you with one question: How am I going to afford that? You could sell your home and move to something smaller, take out a line of credit or tap into your retirement nest egg and put in a few more years at the office. Don't you wish you started thinking about this a little sooner? Like 18 years ago?
On one hand you are very much looking forward to your retirement on the other hand you want what's best for your children. It would be very difficult to learn how to manage money all over again, especially with the golden years just around the corner.
Money, especially today is tight for almost everyone. There are the basic necessities of life and finding a few extra dollars every week is often difficult. Many of us get our paycheck, allot a certain amount for bills and mortgage and car payments etc. and then discover that we can't afford our morning coffee or a night out at the movies. How can you possibly afford to save for your child's education? But how do I find 00 per year?
Did you know...
In 2007 the average consumer unit spends nearly ,000 per year
Roughly 00 was spent on food - 68 of which is spent at restaurants.
The average person spends on coffee each week and per week on fast food.
As I mentioned last week, the average college grad accumulates around ,000 of debt. That is a big headache for anyone, let alone someone who is just starting out. Imagine you could virtually erase that debt and also have plenty to cover the down payment for a house right out of school. Before you go out and seek personal finance help, why don't you consider this. Adjust your spending. We've all heard it before but do small things like brew your own coffee at home or make lunches for work. Not only is it a healthier lifestyle but it will probably save you enough money to pay for little Billy's college education.
Let's say you have automatically debited from your paycheck every week for 18 years. By the time little Billy turns 18 and is ready for school that tiny amount of money has suddenly become for than ,000 (invested at 5%)! I think these are the most simple personal finance basics you can make and you only had to give up a few expensive coffee's and a lousy meal at the food court.
It's difficult to think about what might happen 20 years from now, let alone make financial plans for that future. It's one thing to sock away a certain amount of money for your retirement but can you actually save enough for your children? Absolutely. Small contributions every week or two do add up. You might be surprised that by making small adjustments you will learn how to manage money better each day. If that money is well invested you can even decide if little Billy should go to community college or to Harvard. Start saving today!