A Quiet Fortune: Taking baby steps across a stage
Throw those graduation caps in the air, seniors. If you’re among the 3.5 million high school graduates this year, you deserve big congratulations. You too, parents. Your job is practically done.
Or is it?
If we think our kids are almost ready to be on their own, we might be mistaken. Of course, we all know that college may be looming, and there’s a lot of maturing to be done in the next four or five years. But what’s beyond that? Even when the last cords of “Pomp and Circumstance” fade away after our student’s college graduation day, we may have years of semi-unwanted parenting ahead. Here’s why:
• “Fully one quarter of Americans between 25 and 29 live with a parent — compared with only 18 percent just over a decade ago.” (This is from Ben Sasse, a former college president and the junior U.S. senator from Nebraska.)
• “Americans continue to default on student loans at a ‘stubbornly high’ rate, and a small share of borrowers are unable to buy houses because of high levels of student debt,” reports Josh Mitchell about statistics provided by the Federal Reserve Bank of New York.
• Many financial experts express the same worry that Julia Brufke Wenger, an accountant in Phoenixville, Pennsylvania, voices: “Today’s parents of young adults often have pensions, and they’re usually homeowners. The kids don’t have retirement plans with guaranteed benefits, and they’re renters. I don’t think the parents warn these children about the importance of saving, and that worries me.”
What to do? Start now, well before your student graduates, if possible. Maturing means many things, and financial awareness and responsibility are a part of that maturity.
As I’ve said many times, one of the most important financial steps everyone should take for the future is to stash part of our paychecks away, then invest that bit. Someday most of us will get old. That’s a fact. The last thing we want is to grow very old and very poor at the same time.
But why start teaching this to our kids so soon? It’s because they actually have enough time to save and invest just a very little bit with every paycheck instead of waiting 20, 30, or 40 years to start, then never being able to catch up. If they begin that one small habit, our children could eventually have a genuine fortune to help them live well, even if retirement benefits are long gone (as they are likely to be).
I heard some sage advice the other day from Brian, a 26-year old guy who works at Amy’s Nails and Spa in Glenwood Springs. We were talking about the fact that it’s sometimes tough to mature well in this culture of consumption, reliance on others and temptations of all kinds. Brian wasn’t talking about money; he was discussing the inner changes that come when a young person truly matures. But the concepts are similar. He said: “Baby steps. You have to learn to crawl before you walk. You have to take baby steps first.”
He went on to admit that it’s very hard to leave the security of home and a loving family. But, he explained, when that happens so do many other things. You start to take responsibility for yourself, and that feels good. You begin to set goals and work toward them. Some of those goals might involve helping others, and, “It’s a better feeling to give than to get. You have to grow up, and you do it first with baby steps.”
Independence, responsibility, financial wisdom: All of that can come to our kids, especially if we encourage some baby steps before the day when they stride across that stage, diploma in hand.
Terrie Drake is author of the book “A Quiet Fortune” and a retired teacher and librarian. She and her husband have lived in Glenwood Springs since 1974. She is not a financial adviser; consult a competent professional for your personal financial solutions. She can be reached at email@example.com.
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