GREENSBORO, N.C. — Many people plan to go to college, get a job then retire. What you don't know when making that plan can cost you lots of money.
To help you and your children understand financial planning, 2 Wants to Know was joined by Scott Braddock.
Braddock said having a solid game plan can set up well for future financial success. He said there's three lessons everyone should know.
- Everyone needs to build a budget. It's the key to healthy financial habits. You and your college student should make a budget together. After they live with that for a little bit, you can all go back and see where to make adjustments. Braddock has a workshop designed for college students here.
- You should urge your student to be careful with their credit card. Many young adults don't realize their card accrues interests on the balance they owe.
- Before signing any college loan, Braddock encouraged people to read the fine print. It's important to know what the grace period is and what interest looks like.
Braddock said it's important to pay off loan interest as you go. He said you should work the student loan's monthly interest into your budget. That makes it more manageable to pay off.
People sometimes put off thinking about retirement because of their age. Braddock said you're never too young to start planning ahead.
Some people believe you can only one retirement account. Braddock said that's not true.
Depending on your income, someone may be able to open an IRA in addition to an employee-sponsored 401(k). HE said you can also open multiple IRA accounts.
Braddock debunked another common retirement myth. He said some people think social security will cover all of their retirement expenses. Braddock tells his clients they should plan to need up to 80% of their pre-retirement income to maintain their lifestyle. He said Social Security will only cover about 40%.