3 Financial Tips for the Real World

3 Financial Tips for the Real World

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There are many and varied tips available for anyone looking to educate themselves on what the “experts” recommend when it comes to financial planning. The internet abounds with such tips and advice. 

However, some of these things are easier said than done, especially when it comes to the workaday world and trying to keep up in an ever-more-volatile economy. 

Let’s take a look at some of these tips, and how they can be applied to the real world. 

Emergency Fund

The conventional wisdom is that you should set aside three to six months of living expenses in an emergency fund so as to “weather the storm” should anything unforeseen occur. That’s all very well if you’re only paying extra income into this fund, but what about the regular monthly bills, obligations, and minor emergencies along the way? 

Well, common sense tells us that the three-to-six-month number is really an arbitrary average, and if you can only manage to squirrel away two months’ worth, then consider that a win, and keep contributing when and as much as you are able to. 

Retirement Savings

No matter who you ask, they’ll tell you to start saving as early as possible, preferably in your 20s, or when you first enter the workforce. The problem with this is that student debt is at record levels (Americans owe approximately $1.3 trillion in student loans - which averages out to almost $40,000 per borrower.) 

So how can a young adult, freshly entering into a new career, possibly be expected to pay off his or her loans, while at the same time saving for retirement, which to them probably seems like a lifetime away?

The trick is to get into the habit of taking advantage of your employer’s plan, and contribute only as much as you can at first, then increasing as you are able to. A mistake, and what some people do, is they forget to try and minimize their expenditure at the same time. It’s all a question of habits. If you get in the habit of spending less and saving more, you’re well on your way.

College Savings for Kids

You may have heard the advice to start saving for your child’s college expenses as soon as they are born. Well, what people won’t tell you is that you’re likely to be very, very distracted with some rather unfamiliar things during the first year or two of your little bundle of joy entering your life, not to mention the ongoing financial burdens that come with raising a child. 

Things like lack of sleep, the cost of diapers and baby food, and babysitters, and childcare, and school supplies, and summer camps, and the list goes on and on and on. Unless you have an excess of disposal income, you’re likely to be caught a little off guard when it comes to these new expenses. 

The average cost of raising a child born in 2013 up until age 18 for a middle-income family in the U.S. is close to $250,000, according to the latest annual “Cost of Raising A Child” report from the U.S. Department of Agriculture. 

So, in the real world, what can one do? One thing that can be done is to open an account, and set up automatic monthly contributions in a small, but manageable amount. Then when aunties and uncles, grandparents and friends ask what little darling wants for a birthday, or holidays, you can add “contribute to the fund” to the wish list. 



Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC


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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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