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Hello, Graduates…

Meridian Points


The vast majority of this year’s college graduates are Millennials (between the ages of 18 and 30). As a father of four Millennials, graduation stirs up thoughts about the opportunities and challenges Millennials face.

I feel like I know you Millennials pretty well. You face a competitive job market, and you have a lot to prove. You’re starting off with some debt, and staying on top of your bills and financial obligations will be a struggle. And while you know how important it is to start saving for the future, you aren’t sure how to get started or who to trust.

The Magic Formula

Pay attention Millennials…..There is a Magic Formula – one that even a child can understand – that will insure that you are financially secure for life. This Magic Formula: Save 20% of your pay. Do not ever spend this 20%. Instead, invest it. Spend less than you make and do not borrow money to live a fancier lifestyle. No credit card debt or car loans. No pretending you earn more than you do.

Lifestyle is a Privilege

A recent study by SunTrust found that even folks who make $75,000/year often live paycheck-to-paycheck. One big reason for this is spending too much on eating out and entertainment! Do not adopt the lifestyles of your parents or your irresponsible friends and co-workers. Wait until you can afford to live that way. Do not borrow money to buy a new car. Only your pride will keep you from driving your present vehicle. Save money every month to buy your next vehicle.

The great news is that more than half of you have established a monthly budget AND an emergency fund! Make it a priority to keep up the good work. And if you haven’t started a budget yet, you can start very simply. Every payday, my wife and I used to place cash in envelopes labeled “grocery”, “gas”, “entertainment”, etc. We stopped spending when the envelopes were empty. If you prefer technology, try an app like Level Money. Technology moves forward, but the concept hasn’t changed; only spend 80% of your net pay.

It is true that getting started will require you cut back things like eating out, clothing, vacationing and expensive gadgets. But saving and investing are habits that start with willpower. Over time, you may find that foregoing something in order to stick to a financial goal can be more gratifying than indulging in it!

Time is On Your Side. Give it a Hand

You’re young, and the greatest weapon in your investment arsenal is time. At this point in your life, delaying your financial planning for even a few years can put a huge dent in your retirement savings. The biggest risk in your financial life is failure to adopt and maintain strict financial discipline in saving, investing and spending.

Buy a (used) copy of The Millionaire Nest Door. Read this to understand the inverse correlation between spending and savings.

Follow my simple advice today (before you get used to spending more) and The Magic Formula will make you rich!

Email me if you have questions or need assistance…

Meet the Author

Tom Coulter, CPA


Tom is the President and a founder of Meridian Trust. Tom graduated from The University of Tennessee, Knoxville, in accounting with honors, in 1978. Tom previously worked for the international accounting firm, Deloitte. He later joined the financial medical advising firm, FIS Associates, before founding Meridian Trust in 1997. Tom has worked extensively in retirement planning, taxation, estate and financial planning and investment management. He is a Certified Public Accountant, a member of the American Institute of CPAs (AICPA), and the Tennessee Society of CPAs (TSCPA). Tom is also credentialed as a Personal Financial Specialist (PFS) by the AICPA.