Financial Planning: Help Your Kids Own Their Own Home

When your children are young you can hardly imagine wanting them to leave home. But as the years go by and they mature into adulthood, it is inevitable for them to leave the nest. Help them prepare for the financial situations they may encounter in the near future by discussing these 5 major aspects of finance.

1. How to Save

Learning how to save can arguably be one of the most important habits to cultivate in your life! First things, first: saving has absolutely nothing to do with how much you earn. Whether you make a six-figure salary or an  hourly wage, any type of income can lead to a growing savings account. Get into the habit of putting small amounts of money aside. Try setting up an automatic withdrawal on a monthly or biweekly basis from your main account into a savings account. This will keep you from spending money that was meant to be saved. Chat with one of our AC Lending Group experts for more financial planning tips and advice.

2. How to Ace The Credit Report

You’ve heard countless times that your credit report is your financial report card – but what does this really mean? In order to qualify for a mortgage you must have a minimum of 2 records on your credit report from credit bureaus. A mortgage lender will be looking at this information during the mortgage application process. Be sure to maintain a proper credit score in order to qualify.  

Here’s how you can start building a strong credit score:

• Be mindful with credit card use. Credit cards are not good or bad – it’s up to you and how you use them. Think of credit cards as a tool in your financial planning process. If you use them properly, i.e. not overspending your limit, they will help your credit score in the long run.
• Pay your bills on time. You will also avoid any interest rates associated. Few people realize that cell phone bills also show up on your credit report, so be sure to pay these in a timely manner as well
• Do not pull up your credit report often. This is can be an indication that you could be seeking additional credit or loans.

3. How to Manage Expenses

Spend wisely! Everyone knows this rule but few abide by it. Take the time to consider and research any large purchases you want to make – can you really afford a brand new vehicle at the moment? Is a new smart TV worth putting a dent in your savings and prolonging on purchasing your own home?

4. How to Think Long Term

Now that your credit is solid and you have enough saved up for a down payment on a home – it’s time to decorate. You have come so far, don’t let everything you have learned about financial planning slip away. Think about where you want to live five years down the road. Will your home be in the right location or the right size for your future lifestyle? If not, think about ways to save on renovation and decorating costs, your new home can easily become a rental property in the future. This is a great way for you to make some extra money to put towards your next downpayment.

5. How to Capitalize on Opportunities

Now that you have secured your own home; you have utility bills, mortgage payments, and other expenses to cover. Have space for a roommate? Having someone move in with you generate additional income to help you with those bills.