Graduation is Here!

Julia Carlson |

I want to share some financial advice for our graduates. I have worked as a financial advisor for the past 20 years and hear consistently “I wish I started saving and investing when I was young”. Starting the habit of saving and investing your money early could potentially change your financial future BIGTIME!

First, save your money—every little bit counts! I encourage you to open an account and save a portion, if not most of your graduation gift money.

I want to tell you a story of Judy and Ben*. They both graduated and have part-time jobs as they head off to begin their college years. Judy decides to start saving $2000 a year at age 19 and stops at age 26 with a total investment of $16,000.

Ben decides to buy a car at 19 with payments of $2000 a year and waits to start saving until age 30, at which time he starts investing $2000 a year until age 65 for a total investment of $72,000. Who do you think has more money at age 65 assuming a hypothetical 8% rate of return? Judy does!! Her $16,000 grows to $462,151 and Ben’s $72,000 grows to $404,141. This illustrates the compound effect of interest as well as the value of time with your savings. Start early and get in the good habit of saving a little each month!

Next, live within your means and establish a budget no matter what your income. What this means is, even if your parents (or student loans) are helping you with living costs at college, create a simple plan for how you are going to spend the money each month. If you don’t have a plan, you are planning to fail!

And lastly, do everything you can to avoid debt! Sometimes, this isn’t possible while going to college, but try to work part-time, start a small business, or nanny for local families. There is always something you can do! Falling into the trap of debt in college, especially credit cards and auto loans, makes it hard to get your financial life off to a good start.

Congrats and best of luck to you in the future!

Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing. Your results will vary.

Email me your questions at or call 541-574-6464.

*Story presented above is purely an illustration for teaching/learning purposes.