Why Young Adult Financial Freedom Is Important

Young adult financial freedom is a hot topic these days because chances are when Generation X and Y (and those following after) retires there will be no such thing as Social Security. More now than ever, many experts are saying financial security for the young adult needs to be a priority, so the following are a few teen tips for managing money.

Ways To Young Adult Financial Freedom -Teen Tips For Managing Money

While most people already know that they need to start finding a financially secure retirement plan, they don't know where to look. With rising oil and medical costs, parents of these generations won't be able to help their kids. That means young adult financial freedom is important and both young adults and parents need to arm themselves with financial knowledge.

Video on introduction to financial planning can be found via Vince Shorb at his site at www.FreeBy30.com. Shorb is a young adult financial advisor and creator of the popular, interactive multi-media course, Financially Free By 30. He recommends 401K programs.

As he states, most companies offer matches in 401 K programs, which is one of the top young adult and teen tips for managing money, since it's 'free money.'Unfortunately, according to the National Association of State Boards of Education, most workers aren't participating enough to allow for a comfortable retirement. But the good news is that there are four steps on the road to young adult financial security.

Four Keys For Young Adult Financial Freedom

Shorb states that there are four keys that are great teen tips for managing money:

o         Start investing early - Young adult financial freedom depends on starting earlier to take advantage of the snowball effect of compounding interest.

o         Be consistent with your investment plan - If you decide on a percentage to invest, stick to it at all costs.

o         Use investment vehicles that offer tax benefits - The Roth IRA may allow you to withdraw money at retirement tax-free.

o         Purchase real estate - The reason is this provides a great hedge against inflation.

Shorb, who earned his first million by age 32, claims it's not difficult if you're dedicated, but dedication is the biggest block. Young adults and teens think they can save 'later', but the time is truly now. For example, if an 18-year-old invests just .41 a day in accounts earning 12% on average, which is close the S&P 500's return of 10.5%, they can retire with over $1.3M at age 65. All these lessons and more can be found at www.FreeBy30.com.

So the key is setting priorities. For example, as a parent you could point out to your child that they could buy a new iPod, or they could invest it and someday have enough to buy a Mercedes outright. It won't be today or tomorrow that they'll find material satisfaction, but with time the rewards can be much greater.