Everyone, it seems, is still talking about the $40 million surprise Billionnaire Robert Smith snuck into his commencement address at Morehouse College when he told the grads he and his family were going to “put a little fuel in your tanks” and pay off their student loans. But there were other gems in commencement speeches around the country — in the form of priceless pieces of advice.
From Supreme Court Justice Sonia Sotomayor at Manhattan College: Education has a more important value than money. It is deeply important to our growth as people and as a community…You cannot dream of becoming something you do not know about. You have to learn to dream big. Education exposes you to what the world has to offer, to the possibilities open to you.
From Oprah Winfrey at Colorado College: … What you can do, here and now, is make a decision, because life is about decisions. And the decision is that you will use your life in service; you will be in service to life. You will speak up. You will show up. You will stand up. You will sit in. You will volunteer. You will vote. You will shout out. You will help. You will lend a hand.
And from Jennifer Garner at Dennison: If you’re a woman — and pardon me for being binary for just a second — the stage has been set. The world is yours to grab. Go out and get it, girl.
Making Education A Little Easier
Every one of those addresses was a gift in and of itself. But with 529 Day (i.e. May 29th) coming up tomorrow, here’s a little reminder that if money put away toward education is — as Sotomayor said — the gift that keeps on giving, particularly if you do it in the form of a 529 contribution. A number of states are offering promotions for folks who open and contribute to these accounts on Wednesday. For example, in Vermont, you can enter a drawing to win a $529 contribution, and in North Carolina, you can win a $5,529 deposit for your account. (To see what may be going on in your state, check out the listings at SavingforCollege.com.) FYI, money deposited 529 accounts grows tax free, and is withdrawn tax-free as long as it’s used for eligible expenses, including tuition and fees, housing, meals and books — and now, up to $10,000 per year can be used to pay for private education for kids in grades K-12. Depending on where you live, you may also get a tax break for contributing to your state’s plan. Thankfully, more people are embracing the gift that is 529s, with the number of accounts growing by 30% from 2010 to 2017, to about 13 million…
The Going Rate?
And while we’re on the topic of gifting, Refinery29 has a great rundown on exactly how much we’re supposed to spend on wedding gifts this summer — because let’s face it, you probably have at least two coming up before Labor Day. In 2018, Millennials set aside an average budget of $151 for a good friend’s wedding gift, according to a study from Nerdwallet. Those numbers increased for weddings of “very close” friends. Refinery29 polled a group of Millennial women on their thoughts around wedding gifting, and they summed up what many of us may be thinking, whether or not we’re willing to voice those opinions aloud. For example, when people are a member of the wedding party or have to travel for a destination wedding, they tend to think they’ve spent enough already. Meanwhile, others tend to go “overboard” with gifts and money when family members are involved, and then there are some of us who simply base how much we give on the swankiness of the wedding venue.
And If You’re Still Looking For That Special Someone…
If it’s not quite wedding season in your house, you’re in good company. Turns out Millennials’ attitudes toward love and money are as conflicted as those of every other generation — just in slightly different ways. Today, Gen Y’ers are openly chatting about their salaries, student loans, and credit card debt, with 35% saying that they’re cool with broaching these topics on the first (yes, first!) date, and 60% saying that knowing their crush’s credit score will impact whether or not there will be a second. On HerMoney.com this week we talk about how — and why — Millennials have gotten so bold. Here’s a hint: by the time they’re looking toward marriage, they’ve accumulated a significant level of wealth or debt, and they know from experience how money will impact all their life goals and future decisions… In other words, Millennials know all too well how finances can make or break a marriage, and they have no problem adding “good with money” to the list of the requirements that their significant other must fulfill.
Never Too Soon To Save
Finally, if you’ve just watched your offspring walk across that graduation stage toward — gulp — the workforce, it’s time to encourage encourage them to start securing their own financial futures by saving for retirement. Already? Yes, already. That’s the suggestion from Michelle Singletary in this week’s Washington Post. She writes, “Young adults have at least one thing working in their financial favor: time. Older adults who are faced with delaying retirement longer than they wish often confide in me that, if they could tell their younger self one thing, it would be to start saving for retirement as soon as possible.”
Of course it’s much easier said than done, particularly when recent grads may be facing a mountain of student debt and expensive housing costs — but getting started early is a message we have to hammer home. Even a few dollars per paycheck is better than nothing, particularly if there’s a company match — walking away from that isn’t “like” leaving money on the table — it is leaving money on the table. What may be most important for recent grads is that they have someone with whom they can talk through all their financial concerns and questions about competing priorities. Their heads may be swimming with advice on paying down debt, saving an emergency fund, putting money into an HSA, and investing for retirement. That’s where you come in. One day your son or daughter can absolutely wake up to be a 401(k) millionaire, but they’ve got to master the fundamentals of money management first.
P.S… In case you hadn’t heard, there’s lots of good news for borrowers on the horizon — fixed mortgage rates and interest on federal student loans are both going down. College borrowers will see undergraduate rates drop to 4.53%, down from 5.05%, while graduate students will see a drop to 6.08% from 6.6%. The new rates go into effect July 1, and are fixed for the life of the loan. Additionally, fixed mortgage rates are continuing to drop, slipping to an average of 4.06% for a 30-year-fixed, according to Freddie Mac — that’s down from 4.66% this time last year. Additionally, the 15-year fixed-rate average is now at 3.51%, down from 4.15 percent a year prior.
Have a great week,