This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

How to Manage Your Finances During Each Stage of Life

Save for college. The best time to begin saving for college is the day the baby comes home. There are college savings plans with tax benefits; look at state-sponsored 529 plans and educational savings accounts. Grandparents can also make contributions to college funds.

Midlife

Inheritance and windfalls. There may be money from a home sale, inheritance or insurance payment. This is a great chance to pay off high-interest debt such as credit cards or auto loans. It is also a good time to fully fund an emergency account -- six months of household income -- and put more money into a retirement account.


Teach children about finances. Children learn attitudes about money from their parents, so a good example should be set for kids on saving, spending wisely and charitable giving. Parents should take them shopping and show them how to compare prices, find good deals and walk away from a purchase because the price is more than you can pay. Open a bank account in their name and let them make deposits into their own account. Show them the interest they earn each month on their statement. Give them an allowance and let them make their own decisions about this money, paying for their own toys and games. This also gives them a chance to make mistakes with money. Help them understand that once money is spent, it is gone.

Preparing for retirement

Max out retirement savings. They may still be paying for your children's college education, but it is just as important for people to save all possible for retirement. Will retirement savings sustain someone retiring at 65 for at least 20 years? It is a good idea to save 10% to 20% of an annual income for retirement. Max out your employer retirement plans and Individual Retirement Accounts.

Pay off debt. It is easier to pay off credit card and other debt when there's income. The New York Federal Reserve says 2 million seniors in the United States who are age 60 and over still have their own student loan debt. If you have credit card debt on multiple cards, select the card with the highest interest rate and pay as much as you can above the minimum balance every month. You can even skip dinner at a restaurant and immediately log in to your account to apply that money to your credit card.

Have a plan to make savings last. Today, seniors have a longer life and their retirement savings has to last longer. This may be difficult if their investments are still recovering from the recent financial turmoil. Developing a plan and a budget may require the help of a financial adviser. The FDIC provides some good information on how to help your money last after your last paycheck.

Bill Hardekopf is chief executive of LowCards.com, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs