The debt ceiling crisis was averted, and the markets responded accordingly, with the major indices all up for the week. Friday was also impacted by the jobs report showing that wage growth is slowing down. Unemployment also increased to 3.7%. This information has led many analysts to believe the Federal Reserve Bank will not increase rates at their next meeting. And all of this is good for the stock market.
Something good for me is that my youngest just graduated from high school. If you have a recent graduate, there are several things to do this summer. First, make sure they have a Power of Attorney and Medical Directive. Once they turn 18 and are legal adults, parents can no longer speak for them. Having a Power of Attorney allows you to step in if needed. Many states, including Maryland, have a statutory form, meaning that all businesses in the state must accept the state document.
Next, if they don’t already have checking and savings accounts, set them up. They should have a debit card for their checking account. Teach them how to reconcile their account and discuss overdraft and other fees they may see in their account. If they are going away for school, make sure the bank is accessible wherever they will be this fall.
I also recommend adding them as an authorized user on a credit card, so that they can begin building a credit history. Discuss limits on card use, and consequences for misuse. Once they are in school, several lenders offer student credit cards with low limits. Length of credit history is a key part of your credit score, so starting now can have an impact when they need to lease an apartment or buy a car.
If your child is going away, talk with your home and auto agent about coverage for them. Do you need to get a separate renter’s insurance policy, or are they covered under your homeowner’s policy? Let the agent know if they are taking a car or will only be driving when home on break.
Confirm how your health insurance works if your child will be out of state. And explain to them how the insurance works with in- and out-of-network providers. Summer might be a good time to get dental visits and check-ups done, and refill prescriptions.
You also want to make sure your child is prepared on the home front, and can do their laundry and cook simple meals. If they have a summer job, it’s not too early to start a Roth IRA for them, and teach them how to invest for retirement, as well as budget their spending money earned over the summer across the school year.
Finally, you can sign them up for our high school and college financial literacy class. You don’t want to be Polonius, giving last minute life advice as Laertes heads out the door.
Your action item this week is to take a hike. Our mental, physical, and fiscal health are all connected. Getting outside is a free way to positively impact all of them.
Follow us on Facebook and check out our website at covingtonalsina.com for more information and great resources.
Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investment(s) may be appropriate for you, contact the appropriate qualified professional prior to making a decision.