is only 27 years old. But she has a list of "somedays"
to check off her list. "Someday, I hope to be
married and have kids," said Shekinah Monee, a
model and publicist in New York City. "And, someday
I want to retire and be able to play."
reach the first goal, she dates men "with the
intention of finding someone for a long-term
relationship." To achieve her retirement goal, she
contributes monthly to a SEP 401(k) and a Roth
individual retirement account.
financial planners say, not every young adult has such
foresight. "In fact, according to Hollywood, itís
cool to be irresponsible and in debt," said Judy
McNary, a Broomfield, Colo.-based certified financial
planner and author of "Coin: The Irreverent Yet
Practical Guide to Money Management for Recent College
the recession and the high college costs that drowned so
many with debt, 20-somethings can retire comfortably if
they plan ahead, planners say. Experts suggest taking
these steps, for 20-somethings and the parents they may
be living with:
WITH MOM AND DAD: Monee said she is fortunate that she
lives rent-free with her mother and stepfather. "I
couldnít find a place near my work for less than
$1,200 a month," she said. For young people like
Monee, the easiest way to save money is to delay leaving
your kid keep living at home," said Beth Kobliner,
author of "Get a Financial Life: Personal Finance
in Your Twenties and Thirties."
that doesnít mean a free ride."
that jobs are hard to find, she added, but do not
tolerate the grown child "sitting on the couch
watching Netflix reruns of ĎScandalí while waiting
for the ideal position to come along." Your young
adult should at least pay his or her credit card,
cellphone and car insurance bills, she said, and help
about financial priorities with your kid," Kobliner
said. "If she has lots of credit card debt, talk
about the fact that living Ö rent-free offers an
opportunity to pay it off."
THE DEBT: Itís tough to make retirement contributions
when loan payments eat your expendable income,
especially when they include a complicated tangle of
auto, college and credit card debt.
add up your debts," said Jana Castanon, outreach
manager with Apprisen, a national credit counseling
agency. "This might give you an ĎOh, my goshí
moment. Then, make a plan."
help, call one of the National Foundation for Credit
Counseling member agencies such as Apprisen. They offer
free, 90-minute counseling sessions online, in person or
you have federal student loans, you may qualify for
programs that allow you to make payments based on your
income, not your loan balance. (See .)
You can even have your loan forgiven if you follow the
itís a private loan through a bank, though, youíre
at the mercy of the bankís terms," Castanon said.
to parents with children in college: "Do not be
tempted to co-sign a college loan," Castanon said.
"If the student is late on his payments, it may
affect your credit score."
A BUDGET: Sounds simple? Not to many 20-somethings,
not only their fault," she said.
parents are partially to blame. Growing up, we had three
pairs of shoes ó sneakers, school and church. Now,
kids have shoes for every outfit."
expenses on paper helps a person understand the
difference between "wants" and
"needs," McNary said. "If you can use
public transportation, for example, a car is a Ďwant.í
You donít have to spend money on a car and car
insurance," she said.
instead of a frivolous birthday gift, give your
20-something a session with a "fee only"
financial planner, who does not sell products on
commission. The planner will help your young adult make
a financial road map.
your employer deducts your retirement contribution from
your paycheck, you will not be tempted to spend it, the
advisers said. If you are self-employed, arrange for
automatic payments from your checking account.
your employer offers a 401(k) match, consider it icing
on the cake. A 50 percent match, for example, elevates
your $5,500 contribution to $8,250.
ON BUDGET: McNary encourages her young clients,
"Make a sport of spending less. You can still have
fun with your friends." Brown-bag your lunches.
Shop thrift stores. Get a roommate. Trade your sporty
car for one that costs less to insure. Live rent-free as
a property manager. Decline the invitation to be a
bridesmaid at the pricey destination wedding.
down your retirement goal and put it in your
wallet," Castanon said. "The next time you go
to buy something you donít really need, it will be
trick: "I tell myself Iím splurging when I buy
something I need anyway, like some new black shoes for
THE MIRACLE OF COMPOUNDING: The sooner saving for
retirement starts, the more time money has to snowball.
The money tucked away and the interest it earns both
earn interest. Tape a compounding chart, like the one in
"Coin," to your wall. It shows that if you put
$5,500 a year in an IRA that makes 5 percent, starting
at age 22, you have $1,003,325 at age 60. If you wait
until 40 to start, you will only have $222,978.
all about forming the savings habit early," McNary
said. "Then, when youíre in your 30s and want a
bigger house, youíre not tempted to quit making those
retirement payments. By then itís a habit you wonít
helped accelerate the growth of her kidsí retirement
funds by matching their contributions by 50 percent
until they were on their own. "That helped them see
how quickly the money adds up," she said.
looks forward to the day when "it is cool again to
be financially OK," McNary said. "I do have
the meantime, young adults like Monee surround
themselves with others who "get it," Monee
I date a guy, he has to be financially savvy. If he has
to have all the latest clothes and gadgets, heís not