Kids these days…
I write this post from Williamsburg as I deliver my three kids to my parents to stay this coming week—the annual parent-free visit with grandparents! My kids look forward to this week all summer…I am not sure my parents share the same enthusiasm…
On the trip down, Melanie and I had a nice talk about what comes after high school. She was surprised to learn that her stay in our house was limited to age 24…after that, she is expected to leave and go find her own place to live with her own money. That was a shocking concept for her. However, she embraced it quickly and started to talk through college and career options.
I always like the way Melanie thinks—she noodles through things slowly (you can usually see the wheels grinding in her mind), and when she figures things out, she usually has a pretty good grasp of the situation. In this case, we were discussing going away to school versus staying home for the first year or two and taking classes at community college. She pondered that for a while and decided that saving money and staying home made a lot of sense (her words: “why would you NOT do that? Seems dumb to waste money going away to school!”).
Now, we will see how she feels when she is 18 and can’t wait to get away from her parents, but we are glad she is thinking ahead because the world is certainly unkind to college graduates these days. The job market is tight, but wages have barely moved in 20 years. College costs are up and student loan balances are way up. It is just hard to get a good start today.
This chart is a great visual of what young Americans are facing—high education costs that lead to high levels of post-college debt, and stagnant incomes that make it difficult to make student loan payments AND buy a house or start a family. As the Axios article concludes: “Today, 30-year-old millennials are more likely to be still living with their parents and, while earning about the same or less than boomers, are typically saddled with college debt.” Or as Josh Brown puts it: “How do you start a life these days?”
This reality is why Meridian is building a program to help young professionals get a good start. There are so many financial decisions that come at the very beginning of a career—and even before with financing college—that we want to help young clients start off on the right foot.
Two of our Meridian team members have a deep appreciation for the challenges facing young professionals and young families—as they are living though it themselves!
By nature, Gretchen Kelsey is very frugal. From applying to only one state college because the application fees were so expensive, to taking additional courses over the summer to shorten her time in college, Gretchen grew up making smart money choices. She graduated from college with only $4,000 in student loans!
Gretchen continues to bring her sense of frugalness and practicality into her life as a married mother of two.
Gretchen notes, “In short, my upbringing, my personal desire not to have a lot of debt, and the luck I had with taking the cheapest plan of action I could, has all bled into the financial life I lead as an adult. If I can save money, I do. And that means clipping coupons, shopping second hand, and buying used cars. Also, thank goodness for baby showers and hand-me-downs, because both have been a major money saver with my ever-growing family.”
Gretchen’s advice to her fellow millennials who wonder how to get a good financial start when already saddled with a lot of student debt?
She says: “Sacrifice. Make the move to take the job that pays; cut your living expenses by living with roommates; go to the thrift store for your shopping needs; clip coupons to save on groceries; and use reusable materials whenever possible because waste in the trash is waste in the wallet. Saving money is not easy, but it is worth it!”
Sarah Irving did not come out of the gate knowing she would be working in finance, in fact she received her degree in performing arts! However, in college she discovered she had a knack and underlying passion for finance, business, and relationship management, and began her career working in-house at a consultancy supporting investment banks. Seven years later Sarah is now studying for the CFP board exam and is extremely eager to guide young professionals in nurturing their financial health while removing the fear associated with the subject.
Sarah hopes her unusual background will help to inspire millennials to take the initiative to self-educate.
She notes, “By educating ourselves on financial topics, we are putting ourselves in the driver’s seat of our own financial health and ultimately this takes a lot of the “scare” out of the topic. It does not stop at self-teaching either, millennials should talk to their employer about the benefits available and how to maximize them. I particularly like the blogs on the XY Planning Network. The topics are geared specifically to millennials and written in easy to understand language.”
As Sarah studies for her CFP and works creating financial plans, she has come to appreciate the art of making a plan and sticking to it, saying, “Come up with a plan of attack to pay off student loan debt and build up savings. Know what your options are. Some large employers are even offering a student debt employer contribution program.”
Sarah also notes that major lifestyle changes can really help millennials to pay of their debt: “My last point is something I think we all struggle with, but more so my generation, as we are immersed in a society obsessed with image and social media status. Don’t try to keep up with “Jones’s”. Living within our means is not always fun in the moment, but having the financial freedom to enjoy these things in the future, plus more, is a greater reward.”
Sarah and Gretchen share a passion to help people in their generation make good choices and get a great start—if you are a client of Meridian and would like to send your children to come and talk to us, please feel free. If you are not a client but would like some help to get started, please feel free to call us and we would love to learn more and see how we can be of service!