Give kids good financial start

My buddy at Wachovia in Scottsdale periodically sends me newsletters with financial advice. The following may affect you if you have kids and are concerned about their financial future. Hopefully they will listen to you and your advice. This stuff makes sense:

It's a common goal — to live a better life than your parents. While you may be able to say you accomplished that goal, how likely is it that your children will be able to say the same thing? To help them with that pursuit, make sure to teach them these important financial lessons:

Graduate from college. Even if your children are interested in pursuing careers that don't require a college education, encourage them to obtain a college degree first. It is much easier to go to college straight out of high school before getting married or taking on other responsibilities. And financially, college graduates have higher earnings on average than nongraduates.

Live well within their means. As your children start lives of their own, help them make some fundamental decisions about how to live. Before your children decide where to live or what kind of car to drive, help them prepare a budget to see how much they can really afford for those items and still have money for saving.

Utilize all retirement vehicles available. As soon as they become eligible, your children should start contributing to a 401 (k) plan at work. If their employer doesn't offer a 401 (k) plan, teach your children the benefits of individual retirement accounts (IRAs), both traditional deductible and Roth. The importance of saving for retirement at a young age can't be stressed enough.

Use debt sparingly. If your children take on too much debt early in life, they can spend the rest of their lives struggling to get out of debt. Stress to your children that it is best to use credit cards only if they can pay the balances in full every month. You enhance your credit and can earn points toward cash with certain cards. Other debt, like car loans and mortgages, should only be taken on after a careful analysis of whether your children can afford the payments and whether the purchase fits their financial goals.