An increasing number of young adults are choosing to live with their parents. Today, a whopping 31 percent of adults between the ages of 18 and 34 live at home with their parents.
Whether because it’s too expensive to live on their own or they just aren’t ready to give up the security of their childhood home, a side effect of this trend is that many young adults are unprepared for life on their own.
If you have a young adult preparing to leave the nest, keep reading to learn four ways you can help prepare them for a successful future.
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Protect Your Family With Life Insurance
Perhaps the best way to protect your child as they enter adulthood is by planning for the worst.
When you’re helping your teen choose a college and plan their own future, the last thing you might be thinking about is life insurance. But if disaster strikes, the money you’ll get from your life insurance policy can help your young adult children continue paying for college, provide them with the money to pay for somewhere to live and help cover your funeral expenses. Without life insurance, you could wind up saddling your young adult with debt and an uncertain future before they ever have a chance to get on their own two feet.
If you served in the military, USAA can help you get an affordable life insurance policy that will allow you to protect your children at any age.
Teach Your Young Adult the Importance of Various Types of Insurance
While you’re getting a life insurance policy for yourself, don’t forget to teach your young adult the importance of various types of insurance.
Whether because of tight budgets or because they simply don’t think they need it, many young people skip out on important insurance coverage. Around one out of every four adults between the ages of 18 and 29 don’t have health insurance. That’s double the rate of adults over the age of 29.
Teach the young adults in your life the importance of not just health insurance, but renter’s insurance and car insurance as well. Even a short lapse in coverage when they get their own car or leave their parent’s insurance could turn into years of debt.
Learn to Live on a Budget
Your first time living on your own can be scary, but it can be exciting as well. Suddenly you can choose what kind of food to fill your fridge with, decorate your own home, and go and do whatever you want. Coupled with an income of your own, it’s easy to fall into the trap of buying more than you can afford. It’s especially easy to overspend on expenses you’ve never had to worry about on your own before, like groceries, home decor or gas.
Learning how to set a budget and stick to it early in your 20s or even late teens will help your young adult start healthy financial habits that you’ll be grateful for the rest of your life.
Look at the Long-Term Cost of Big Purchases
Another important financial skill that all young adults need to learn is the importance of looking at the long-term cost of big purchases. Whether it’s a student loan or a car, understanding how long they’ll be paying them off, what the monthly payments will look like and how to calculate interest rates will help them to better understand what a big expense will really cost when you’re finished paying it off. This will also make it easier to decide how much they can afford to borrow and finance.
Setting Your Young Adult Up for Future Success
Helping your child navigate adulthood can be confusing and stressful. But by teaching them how to live on a budget and understand the cost of big purchases, the importance of insurance and by taking out your own life insurance policy, just in case, you can set them up for success at any age.