Five Steps to Cutting the Financial Umbilical Cord

One of the biggest impediments standing in the way of retirement for today’s baby boomers is their children.  Everyone knows that cost of raising a kid is high, but what’s holding many parents back is the cost of their kid even after they are raised.  Ameriprise Financial surveyed a group of these baby boomers and found that over 90% admit to providing financial support to their grown children.  Over half of them have allowed their kids to move home and live rent free while 71% have helped their kids pay for college.  This doesn’t include all of the parents still dishing out for car insurance, cell phone bills, health insurance, and so on.  It’s a parent’s basic nature to want to support their kids, but there comes a time when it’s best for both sides to cut the umbilical cord and create some financial independence.

50% of the paycheck goes to needs, 30% funds your wants, and 20% should head to savings.

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