Roadmap to Generational Wealth

Do's: 

• Create a Budget: Track income and expenses to understand cash flow.
• Automate Savings: Treat savings like a non-negotiable bill, ideally using automatic transfers.
• Build an Emergency Fund: Aim for $500–$1,000 initially, working up to 3–6 months of expenses. 

Don'ts:  

• Don't Shield Children from Realities: Involve kids in age-appropriate money conversations to prevent future mismanagement.
• Don't Rely on Impulse Spending: Resist buying on impulse; differentiate between needs and wants.
• Don't Procrastinate Saving: Do not wait for a higher salary to start saving or investing.  

Do's:  

• Do Automate Your Savings: Set up automatic transfers from your paycheck or checking account to a savings account.
• Do Build an Emergency Fund: Aim for 3–6 months of living expenses in an easily accessible, FDIC-insured account.
• Do Follow the 50/30/20 Rule: Budget 50% for needs, 30% for wants, and at least 20% for savings and debt repayment. 

Don'ts:  

• Don't Keep Savings in Your Checking Account: Avoid keeping, or mixing, savings in your daily spending account to prevent accidental spending.
• Don't Chase Unrealistic Returns: Be wary of high-yield promises that may be scams; stick to FDIC-insured or NCUA-insured institutions.
• Don't Deprive Yourself Completely: Similar to a diet, extreme cutting leads to binge spending. Allow for small treats to maintain long-term habits.  

Do's:  

• Pay on Time: Pay all bills by the due date to avoid late fees and negative marks.
• Keep Utilization Low: Maintain a credit utilization ratio below 30%, ideally lower, by keeping balances low relative to your limits.
• Monitor Credit Reports: Regularly review your credit report for errors or identity theft, particularly using the free service at AnnualCreditReport.com. 

Don'ts:  

• Don't Max Out Cards: Reaching your credit limit ("maxing out") severely harms your credit score.
• Don't Open Many Accounts Quickly: Avoid opening several new credit accounts in a short period, as this reduces your average account age.
• Don't Miss Payments: Missing a payment by 30 days or more can significantly hurt your credit score.
• Don't Close Old Accounts: Closing accounts reduces your available credit and shortens your credit history.
• Don't Use Cash Advances: Avoid using credit cards for cash advances, as they often have high fees and immediate interest. 

Do's:  

• Do Plan Early: Start exploring schools, programs, and requirements during your junior year of high school to avoid rushing.
• Do Practice Self-Advocacy: Learn to communicate directly with instructors for help and understand your own accommodation needs.
• Do Budget and Save: Track your spending and use tools like StudentAid.gov to research funding, while using cash to limit unnecessary spending.
• Do Utilize Resources: Visit professors during office hours, attend advising sessions, and engage with campus career centers.
• Do Stay Organized: Create a structured schedule that includes, classes, study time, and personal commitments.
• Do Buy Used Textbooks: Rent, buy used, or find e-versions of textbooks to avoid high costs.  

Don'ts: 

• Don't Procrastinate: Do not wait until the last minute to start studying for exams or completing assignments.
• Don't Isolate Yourself: Get involved in extracurriculars and build a supportive community for the transition.
• Don't Ignore Financial Realities: Avoid excessive student loans by evaluating if your chosen program matches future earning potential.
• Don't Take Too Many Easy Classes: Avoid boosting your GPA with irrelevant, easy classes, as colleges favor academic rigor.
• Don't Forget to Check Email: Check your student portal daily for important announcements and deadlines.
• Do Consider Alternatives: Look beyond four-year degrees; consider technical certifications, community colleges, or career-focused training.
• Do Visit Campuses: Familiarize yourself with campus facilities, libraries, and housing options. 

Do's:  

• DO arrive early and be prepared for your workday.
• DO network with colleagues outside of your immediate team.
• DO be honest about work-related issues and limitations.
• DO show initiative for new tasks and be flexible.
• DO arrive 15 minutes early and bring extra resumes.
• DO research the company and prepare examples of your work.
• DO send a thank-you letter expressing interest. 

Don'ts:  

• DON'T engage in office gossip or badmouth colleagues and bosses.
• DON'T reply to all company-wide emails.
• DON'T bring personal drama or high emotions to your desk.
• DON'T interrupt others in meetings.
• DON'T lie or embellish your experience or education.
• DON'T speak negatively about past employers.
• DON'T ask about salary or benefits too early. 

Do's:  

• Do Diversify: Spread money across various asset classes to reduce risk.
• Do Think Long-Term: Focus on long-term growth, not short-term speculation.
• Do Your Research: Understand what you are investing in (company, fees, risks).
• Do Automate: Invest consistently, such as monthly, to benefit from dollar-cost averaging.
• Do Use Tax-Advantaged Accounts: Maximize contributions to 401(k)s or IRAs.
• Do Maintain an Emergency Fund: Ensure you have cash savings before investing, so you don't have to sell investments in a panic. 

Don't:  

• Don't Panic Sell: Avoid making emotional decisions during market downturns.
• Don't Invest What You Can't Lose: Never invest money needed for short-term expenses.
• Don't Chase Trends: Avoid chasing "hot tips" or stocks that have already spiked.
• Don't Ignore Fees: High fees can significantly reduce long-term returns.
• Don't Time the Market: Trying to predict market highs and lows rarely works.
• Don't Put All Eggs in One Basket: Avoid investing all money in a single stock or sector. 

Do's:  

• Do hire an experienced attorney: Estate laws are complex and vary by state, so consult a qualified independent tax advisor and/or attorney to ensure documents are legally sound.
• Do update beneficiaries: Regularly review beneficiaries on life insurance, retirement accounts, and bank accounts, as these override your will.
• Do plan for incapacity: Create a durable power of attorney and healthcare proxy to make decisions if you become unable to.
• Do plan for minor children: Specifically designate a guardian for minor children to prevent court intervention.
• Do include digital assets: List digital assets, including social media accounts, cryptocurrency, and digital files, in your plan.
• Do create a list of assets: Clearly document all assets, including property, bank accounts, and investments, to ensure nothing is overlooked. 

Don'ts:  

• Don't procrastinate: Avoiding planning can lead to legal hurdles, higher taxes, and family conflict.
• Don't rely solely on DIY templates: Online templates often fail to address specific personal situations or state-specific laws.
• Don't forget to update your plan: Review your plan every 3–5 years, or after major life events like marriage, divorce, or the birth of a child.
• Don't pick the wrong executor: Choose someone responsible and capable; a poorly chosen executor can cause significant delays and disputes. 

Do's: 

• Do get pre-approved: Know your budget by getting pre-approved for a mortgage before house hunting.
• Do inspect the property: Invest in a comprehensive professional home inspection, including structural, pest, and radon checks.
• Do save for emergency repairs: Prepare for unexpected costs like a broken HVAC system or roof leaks (typically 1–3% of your home's value yearly).
• Do maintain good credit: Keep your finances stable by paying all bills on time and avoiding new credit inquiries.
• Do research the area: Look into school districts, crime rates, and neighborhood amenities. 

Don'ts:  

• Don't buy at your maximum budget: Leave room in your budget for property taxes, insurance, and maintenance costs.
• Don't change financial status: Avoid switching jobs, taking early retirement, or becoming self-employed during the loan process.
• Don't make large purchases: Do not buy furniture, appliances, or cars before closing, as this can affect your debt-to-income ratio.
• Don't ignore inspection results: Negotiate repairs or walk away if major, unexpected issues arise.
• Don't liquidate all savings: Ensure you have cash for emergencies after paying the down payment and closing costs. 

Do's: 

• Do create a detailed budget: Know your monthly expenses — both essential and discretionary — rather than relying on estimates.
• Do consider delaying Social Security: Waiting until full retirement age (or age 70) can provide a higher benefit.
• Do diversify investments: Maintain a balanced portfolio to reduce risk while keeping up with inflation.
• Do have a withdrawal strategy: Plan which accounts to draw from first to minimize taxes, such as utilizing Roth accounts.
• Do plan for healthcare costs: Use Health Savings Accounts (HSAs) to prepare for medical expenses.
• Do update legal documents: Ensure wills, beneficiaries, and estate planning documents are current. 

Don'ts: 

• Don't spend too fast early on: Avoid high spending in the first few years (the "go-go" years) to ensure your money lasts.
• Don't be overly conservative: Keeping all assets in cash can erode purchasing power through inflation.
• Don't ignore Required Minimum Distributions (RMDs): Failing to take RMDs from retirement accounts can result in severe penalties.
• Don't be too generous: Do not jeopardize your own financial security by giving too much to family.
• Don't take on new debt: Avoid financing large purchases or carrying debt into retirement.
• Don't forget to update your plan: Review your investment portfolio and financial plan annually or during major life events.