It’s Thanksgiving week. And if you’re fortunate, you can look around your Thanksgiving table and see several generations of your family. Of course, as you know, many types of cohesiveness are involved in knitting a family together. But one connection that frequently gets ignored, at least in terms of family dialogue, is the financial linkage between parents and their children on one hand, and these same parents and their parents on the other. So if you find yourself in this “sandwich” group, it may be worth considering your financial position.
If your children are very young, you might want to start by emphasizing the importance of three separate concepts: saving, spending and sharing. If you give them an allowance, or if you pay them to do some minor tasks around the household, you can encourage them to put the money in three separate containers. The “spending” jar is for them to use as they choose, the “saving” jar is to be put in some type of savings or investment account and the “sharing” jar is to be used for contributions to charitable causes. You can extend the spending, saving and sharing themes by encouraging your kids to spend wisely, watch how their savings grow and feel pride in the work done by the charitable groups their dollars support.

Late fall marks the beginning of the holiday season, which probably means that you’ll have a lot going on over the next couple of months. However, busy as you are, you’ll want to take the time to review your employee benefits package, since November also is a popular month for employers to offer open enrollment. And the decisions you make now could have a big impact on your financial outlook for years to come.

So, if you are in an open enrollment period, here are some steps you may want to take:
• Boost your 401(k) contributions. It’s almost always a good idea to put in as much as you can, up to the contribution limit, in your 401(k) or similar retirement plan. After all, you typically contribute pre-tax dollars, so the more you put in, the lower your taxable income. Also, your money can grow on a tax-deferred basis, which means it has the potential to grow faster than an investment for which you paid taxes every year. At the very least, contribute enough to earn your employer’s match, if one is offered. For example, if you work for an organization that will match 50 percent of everything you put in up to, say, 6 percent of your salary, then you should contribute 6 percent of your salary — which is like getting a three percent raise.

On July 4, we shoot fireworks, attend picnics, watch parades and otherwise celebrate our nation’s independence and the many freedoms we enjoy. But as you go through life, you’ll find out how important it is to work towards another type of freedom — financial freedom. That’s why you need to put strategies in place to help you work towards your own Financial Independence Day.
And there’s no way to “sugar-coat” this task, because it will be challenging. In recent years, a combination of factors — including depressed housing prices, rising health care costs, frozen or eliminated pension plans and the financial market plunge of 2008 and early 2009 — has made it more difficult for many of us to accumulate the resources we’ll need to enjoy the retirement lifestyle we’ve envisioned. In fact, the average American family faces a 37 percent shortfall in the income they will need in retirement, according to a recent report by consulting firm McKinsey & Company.