Friday, February 16, 2018
Business

A saving strategy for 20-somethings

She is only 27. But she has a list of "somedays" to check off her list. "Someday, I hope to be married and have kids," says Shekinah Monee, a model and publicist in New York City. "And, someday I want to retire and be able to play."

To 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.

Unfortunately, financial planners say, not every young adult has such foresight. "In fact, according to Hollywood, it's cool to be irresponsible and in debt," said Judy McNary, a certified financial planner in Colorado and author of Coin: The Irreverent Yet Practical Guide to Money Management for Recent College Graduates.

Despite 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:

Bunk with Mom and Dad: Monee said she is fortunate that she lives rent-free with her mother and stepfather. "I couldn't 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 the nest.

"Let your kid keep living at home," said Beth Kobliner, author of Get a Financial Life: Personal Finance in Your Twenties and Thirties. "But that doesn't mean a free ride."

Acknowledge that jobs are hard to find, she added, but do not tolerate the grown child "sitting on the couch watching Netflix reruns of Scandal 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 cover groceries.

"Talk about financial priorities with your kid," Kobliner said.

Ditch the debt: It's 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.

"First, add up your debts," said Jana Castanon, outreach manager with Apprisen, a national credit counseling agency. "This might give you an 'Oh, my gosh' moment. Then, make a plan."

For 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 by phone.

If 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 studentaid.ed.gov.) You can even have your loan forgiven if you follow the government's criteria.

Make a budget: Seeing 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 'want.' "

Parents, 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.

If your employer deducts your retirement contribution from your paycheck, you will not be tempted to spend it. If you are self-employed, arrange for automatic payments from your checking account. If 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.

Stay 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. Decline the invitation to be a bridesmaid at the pricey destination wedding.

Enjoy the miracle of compounding: The sooner saving for retirement starts, the more time money has to snowball. (See accompanying story.) 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.

"It's all about forming the savings habit early," McNary said. "Then, when you're in your 30s and want a bigger house, you're not tempted to quit making those retirement payments. By then it's a habit you won't break."

• • •

In the meantime, young adults like Monee surround themselves with others who "get it."

"When I date a guy,'' she says, "he has to be financially savvy. If he has to have all the latest clothes and gadgets, he's not for me."

Comments
Trump administration recommends stiff penalties on steel, aluminum imports

Trump administration recommends stiff penalties on steel, aluminum imports

The Tampa arm of Brazilian steelmaker Gerdau S.A. was cautiously optimistic Friday after the Trump administration took a big step toward a policy Gerdau has been vocally advocating for — higher tariffs on imported steel. "We’re hopeful that President...
Published: 02/16/18
Facebook forges ahead with kids app despite expert criticism

Facebook forges ahead with kids app despite expert criticism

Associated PressNEW YORK — Facebook is forging ahead with its messaging app for kids, despite child experts who have pressed the company to shut it down and others who question Facebook’s financial support of some advisers who approved of the app. Me...
Published: 02/16/18
Inexpensive Tampa Bay homes gain the most value of any in U.S.

Inexpensive Tampa Bay homes gain the most value of any in U.S.

Owners of affordable homes in the Tampa Bay region are seeing the biggest gains in equity among the nation’s top 20 housing markets. A bay area home now worth $110,000 rose 20 percent in value over the past year while a house now worth $337,400 incr...
Published: 02/16/18
Amid CareerSource controversy, allegations of a love affair, big raises and family favoritism at the top

Amid CareerSource controversy, allegations of a love affair, big raises and family favoritism at the top

The anonymous letter described a possible love affair at the top of the local jobs center. President and CEO Edward Peachey was in a romantic relationship with top administrator Haley Loeun, it said.It described how Loeun was seen at a conference co...
Published: 02/16/18
Outback Steakhouse, Carrabba’s experimenting with takeout-only locations

Outback Steakhouse, Carrabba’s experimenting with takeout-only locations

Outback Steakhouse and Carrabba’s Italian Grill have become household names in casual dining. Now, their parent company, Tampa-based Bloomin’ Brands is taking the "dining" part out in a concept that it’s bringing to Tampa Bay for the first time. A ne...
Published: 02/16/18
Which Tampa Bay ZIPs had the priciest, least expensive and most house sales in 2017?

Which Tampa Bay ZIPs had the priciest, least expensive and most house sales in 2017?

If you bought or sold a house in Tampa Bay last year, you were a player in one of Florida’s hottest real estate markets.Even though prices eased a bit from their torrid pace in 2016, the median cost of a single family home shot up 11 percent. That’s ...
Published: 02/16/18
Florida’s liquor license lottery can make you a ton of money. So why is it such a secret?

Florida’s liquor license lottery can make you a ton of money. So why is it such a secret?

Every year, millions of people play the Florida Lotto. Their chances of winning are about as great as those of being struck by a comet. Fewer than 12,000 enter a much lesser known lottery that also is run by the state. Yet the odds of winning are vas...
Published: 02/16/18
Travel insurance company brings tree houses, beer kegs and creativity to former church

Travel insurance company brings tree houses, beer kegs and creativity to former church

ST. PETERSBURG — Neither the Lutherans who first occupied the 4300 block of Central Avenue, nor the evangelical congregation that followed could ever have imagined tree houses sprouting in their church sanctuary.Yet that’s one of the plans of new own...
Published: 02/16/18
Prosecutors drop drug case against ConnectWise co-founder David Bellini

Prosecutors drop drug case against ConnectWise co-founder David Bellini

TAMPA — ConnectWise co-founder David Bellini won’t be prosecuted on a drug trafficking charge filed by Tampa police this week, the Hillsborough State Attorney’s Office announced Thursday. The county’s top prosecutor instead applauded police for helpi...
Published: 02/15/18
Tropicana Field may be named for a Pepsi product, but it will now only serve Coke

Tropicana Field may be named for a Pepsi product, but it will now only serve Coke

ST. PETERSBURG — The Tampa Bay Rays’ stadium may be named for PepsiCo’s Tropicana orange juice, but that’s not stopping the baseball team from switching its pouring rights to Coke.The Rays said Wednesday the ballpark would begin serving Coca-Cola pro...
Published: 02/15/18