by Joanne Parker
With Thanksgiving around the corner, I ask myself if a new kind of pie should be on the table in my household: a budgeting pie.
My son graduates college in May. A couple of weeks ago, he asked me to help him develop a plan so he can be financially independent within 6 months of graduation. Considering that a recent study showed that only 24% of young adults in 2018 were financially independent by age 22 or younger, I’m thrilled he wants to be ahead of the curve.
Thankfully, I work for the largest global provider of financial literacy education for students kindergarten through 12th grade, Junior Achievement. This means I have access to excellent resources on topics like understanding a credit score, reading a credit card statement, interest rates, saving, and budgeting. But I also asked some friends and colleagues in the financial services field what advice they would give their 22-year-old selves about becoming financially independent. Here’s what they had to say:
Ellen Ambrose, from Liveoak Technologies says, "Keep your lifestyle the same, even as your income increases through your 20's. That means don't buy a new car, keep the same apartment, don't take expensive trips. Use the extra money to 1) participate in a 401K if your employer offers it and 2) set up automatic deposits into a brokerage account. Tell yourself the accounts are off limits until the future.”
Jenna Mejia, from BBVA says, "I would tell my 22-year-old self to be cautious of how small, unnecessary expenses can really add up! I would tell her to plan ahead, bring leftovers for lunch, and slow down on the frequent coffee shops stops in the morning on the way to work!"
Lisa Kottler, FinTech Evangelist says, “Spend less than you make! Always. Pay cash for everything (except your home). Don’t be tempted to keep up with the Jones’ because it’s possible they went into debt to get that fancy car or expensive vacation.”
Allegra Moet Brantley, from FactoraWealth suggests, “I would open an investment account (in addition to any employer sponsored retirement account available) and set up an automatic deposit of $100 a month from my paycheck hit. I would raise the monthly amount by $100 for every birthday, raise, or promotion I got. Everytime I wanted to get a nicer apartment, car, etc, I would only do it if I could also increase my investment account contribution too (only gifting myself if I could also gift future me!) This would allow me to use my 20’s for investing (which a lot of young people miss out on) and would give me an extra decade for compound interest to work its magic.”
As we enter the holiday season, are we able to give our loved ones the best gift of all: the gift of financial independence?
Joanne Parker is a development manager for JA of Central Texas. She is a former sales executive with Abbott Laboratories and is the JA staff lead for JA F.E.M. Forum. Joanne strongly believes that financial literacy education is the foundation to achieving economic equity for all.
Austin companies of all shapes and sizes are encouraging financial literacy and equity dialogue by supporting the JA F.E.M. Forum on Thursday, April 2nd, 2020. F.E.M. Forum brings together professional women with female students over breakfast for a morning of networking, mentoring and financial education. It’s the only event of its kind in Austin, the biggest annual fundraiser for JA Central Texas, and is designed for companies and business leaders who believe #FinancialEquityMatters. Learn more about the event and how you can support here.
#FinancialEquityMatters #PersonalFinanceForWomen #HerMoney
