It was chilly and rainy in Philadelphia on graduation day in May. But, nothing was going to dampen our spirits on the grand occasion of our older daughter’s graduation from a prestigious university. She worked hard for years at her academics and is one of those kids who just loves learning. Like her daddy and many of her relatives on both sides of the family, she is strong in math and science, and truly enjoyed studying electrical engineering. Really? Can’t you take at least one marketing class?
I couldn’t have been prouder of this young woman who walked across the stage. Diploma inscribed in Latin in one hand, job offer in the other.
She is one of the lucky ones of her generation to land a very good position despite the terrible job market. (That she will be moving from New England to California in 4 short weeks is a separate reality I’ll have to deal with.) She is excited for her first big “adult” adventure. She’s even enthusiastic that she’ll be spending a week cooped up in her car with her mom on our drive across the country! 3,000 plus miles, 5 days. That should be fun!
While sitting in the huge football stadium waiting for Vice President Joe Biden to give the commencement address, I couldn’t help but wonder how this generation of young people will pull it all together. So many will have large students loans, so how will they be able to pay for an apartment, a car, insurance, food and of course, their iPhones and iPads? How will they afford their taxes and health care coverage? And, how can they possibly carve out any of their money to eventually buy a house or save for retirement?
Saving in your 20’s is actually one of the best financial steps you can take for life-long financial health. Long-term savings, however, need to balance with building an emergency fund and paying off student loans. I’m beginning to wonder if it is an impossible task for the Millennials. Unless these young people get a job with a high enough paycheck, or move in with mom and dad again, how can they possibly do it all?
Parents with enough means to not jeopardize their own retirement savings may need to strategically help their kids financially while fostering their independence. In our case, we are going to do 4 key things this first year that she is living on her own: continue to pay the car loan and auto insurance; keep her on the “friends and family” cell phone plan; stay on our family health insurance plan; and, get her plane tickets to come back home for the holidays. (Truthfully, that last one is really for me – I just know I am going to miss her terribly!)
This keeps us tied together financially more than we hoped, and it’s certainly different from our independent start some 30 years ago. But as I sit back and look at this younger woman, I know that she is making the right decisions to get her adult life started. A little extra help from “the bank of mom and dad” won’t hurt us…and will make a big difference to her. She can now take full advantage of her 401(k) and capture the match her company offers. She can build her emergency fund and pay her student loans.
Long after current iPhones are considered “ancient” technology and she’s bought her own car, she can look back on her 20s and know that those early years of investing gave her a great start to her retirement.