Dollars and Sense Part III: An Open Letter to the Class of 2016

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As both high school and college graduates are preparing to take that next step, long term financial planning often takes a back seat to other pursuits and interests. While my husband and I have, for the most part, made sound financial decisions, there are a few bits of wisdom I wish we would have known and applied earlier. So here is an open letter to all graduates, sharing the pearls of wisdom we learned along the way.

To the Class of 2016,

While your parents may have started discussing this with you, long term financial planning is probably the farthest from your mind right now. I want to share three of the investing tips we learned along the way, specifically those things we wish we knew in our late teens and 20s.

First, if you are working and at least 18, you are eligible to sign up for a retirement IRA. The Roth IRA is a powerful retirement savings plan, which allows the investor to add up to $5,500 per year. While there is no upfront tax advantage, your money grows tax free, and in retirement, all withdrawals are tax free, and investors are not forced to make RMDs, Required Minimum Distributions. Meaning, the government does not force you to make yearly withdrawals from the account (The Traditional IRA requires a yearly RMD starting at age 70 1/2). Roth IRAs grant the investor the flexibility to make retirement withdrawals when needed.

In addition, investors often utilize multiple accounts because many businesses offer a retirement plan with a company match. This means for every dollar you add to your individual retirement plan through work, the company will match a portion of your investment (up to a set amount established by each individual business). In the future, if you work for a company that offers a match, invest in your company’s plan before any other contributions. A company match is extra money for your retirement!!! A common investment strategy begins with maxing out a company’s retirement plan (401K, 403B, etc.) utilizing the company match, then using any extra funds available for a Roth IRA.

The final bit of information I wish we had known at your age is just how much additional money is earned by investing early. Every $1,000 you invest in your late teens and 20s is the equivalent of your parents investing around $4,000 as adults in their 40s. Historically, an investment account doubles every 8-12 years. Think about that for a minute:

$1,000 becomes $2,000
$2,000 becomes $4,000
$4,000 becomes $8,000…

Imagine being in your 50s with $500,000 saved? Watch yourself reach $1,000,000!

Many might ask, between regular bills and loans, just where am I supposed to find any extra money? While budgeting entails another post, Hubby and I kick ourselves sometimes when we consider what a difference forgoing the occasional weekend pizza, the impulse purchases, or those fancy coffee drinks could have added to our financial security. Those extra $5-$20 truly add up! As a starting point, could you invest $500 per year by giving up a few extras?

So as you begin your financial journey, please remember these three things:

  1. Sign up for a Traditional or Roth IRA in the near future. Note: In my opinion, Roth IRAs provide an excellent starting point and unique benefits in retirement.
  2. If your employer offers a retirement plan with a company match, invest money there first; then apply any extra to your Roth.
  3. Remember how much farther investing in your 20s will advance your financial goals.

Just where can one sign up for an IRA? Ask your parents, browse on-line articles, and educate yourself on the best path for financial independence! Investing can be confusing and retirement seem so far off; however, take the time now to learn about retirement investments. A financial advisor can help with questions and concerns. Google “Roth IRA calculator” and enter whatever you think you can save; see just how large your nest egg can grow! The financial decisions you make in the next ten years will greatly affect your future! Be smart!

Best of luck,



Are you Married to the World’s Cheapest Man?


I used to think my husband, Chad, was the cheapest man on earth.  The first summer after our wedding, we were renting a run-down apartment while saving a down payment to purchase our first home.  This was an upstairs apartment in late July, and summer’s heat had arrived!  We had an old window air conditioner unit for our bedroom, but Chad refused to run it…too expensive.  I had just returned from my job, packing religious supplies (in another home with no air conditioning).  I had reached the point that happens every summer where I just couldn’t cool down.  I wouldn’t be able to sleep without the air conditioning, so I finally demanded that we chill the room.  His reply was priceless, “OK, we’ll run it for ten minutes.”

Gifts were another area where we have laughed and grown as a couple.  I’ll admit that I have poor judgement for purchasing gifts and have since learned that I should stick to items available at Cabela’s, Gander Mountain, or our local outdoor supply stores.  My favorite gift faux pas was what we now refer to as the “Pirates of the Caribbean on Broadway” stage prop (as pictured below).  I thought it would make a nice conversation piece for our wine cellar.  Hubby just thought it was weird!   Chad’s frugal nature, of course, extended into gift giving, clothing in this case.  I love to wear sweat pants.  I would consider wearing them every day if I could get away with it.  Our first Christmas, I was thrilled to receive a new pair, in hunter green, a color I didn’t have.  I held them up to take a look, and the first thing I noticed was that one pant leg was six inches longer than the other.  I stared at the discrepancy and looked over at my husband.  He just shook his head and said, “Oh, they were on sale.”

While we have laughs at Chad’s expense, I know I married a keeper.  While sometimes his high level of frugality causes frustration and disagreements, I see how far sacrifice has taken us.  I still debate and argue for things I feel strongly about purchasing or doing (date night is important to me), and most of the time, we find compromise.  I married a man who puts the financial care of his family above all else.  He considers paying the bills, putting food on the table, and giving to charity a matter of honor.  He’s also disciplined enough to pay himself first because he refuses to be a burden in retirement.  Finally, I see those financial lessons passed on to my kids, a lesson that will take them far as adults.