When Should Financial Planning Begin?

In a perfect world all parents would sit down with their 15-16 year old children and try to explain the vast mystery of financial planning. It is a vast mystery because even at 65, some people still have no idea how to start or understand financial planning. Some parents do manage to achieve this feat but most do not and send their young ones into the wild on their own.

Most young people get their first true jobs (aside from babysitting and after-school work) once they get out of college. Unless they learn from their first bad experience or two it will take a few if not many years to get their finances in order.

The first obstacle for many young people is student loans and credit cards. Student loans are due once they graduate and if not paid on time accrue interest and can take years to catch up and pay off.

Credit cards are sent to college students with high limits and most students max out these cards only to spend years paying on them if they pay on them at all.

Credit reports do not become an issue with young people most of the time until they have to purchase something, finance it or rent it (apartment, house) where your credit is always checked. This is when most people are clued in that they owe on things from their past.

If they want to get a handle on their financial habits they will sit down with their credit reports and get started on how to take care of the items on it. This will usually start them down the path of wanting take their finances in hand.

If they haven't already, they need to set up a monthly budget that will include putting money aside into a savings account or other means of their choice. They should take a closer look at their company retirement accounts to make sure they have chosen the best one (i.e. 401K).

Financial planning can never start early enough. As parents we have a duty to not only set a good example but to teach our children so they have an easier time in their financial lives ahead.