The following is a paid podcast from Prudential.

 

FS: Welcome to MoneyMind, a podcast about money made exactly for you. I’m Faith Salie.

 

So you’re a Structured Saver. And you’re in your 20s. I’ve learned a lot lately about what it’s like to be a Structured Saver in your 20s. And I’m here to share that information with you.

 

Let’s start with the “saver” part. I went out and asked some Structured Savers about their finances. Here’s what they had to say about money.

 

My dad is a super saver. He bought stuff on sale all the time, and worked two jobs growing up.

 

My mindset is more, if i can't pay it off within a paycheck or two paychecks, unless it's absolutely necessary, I don't get it.

 

I didn’t let my credit card bills add up. I didn’t like paying finance charges or interest. I think that helped me a lot.

 

I try not to be that anxious about it. I try to be a little bit more relaxed about it but mindful that I have to put money aside just in case something happens.

 

FS: These are my takeaways about Structured Savers. You’re proactive with your money. You work hard at managing your finances. You even enjoy it! You’re not afraid of budgets -- in fact, you like looking at the numbers. And you make thoughtful, well-researched decisions. Financial planners love you.

 

I am a structured saver at heart and I think I always have been. I like knowing where my money is. I like being aware of when it should shift to a new place. I try to enlist experts to help me on that. And I also like looking at the numbers every once in awhile. It feels like both a sense of accomplishment and comfort.

 

Structured Savers are people of all ages and income ranges. You don’t have to be Bill Gates to save money. I was reminded of this when I met Christina, a single mother of two who works multiple jobs to maintain her savings accounts.

 

Christina: My name is Christina. I am a big saver with my money, but at the same time I don't stop myself from going out and having fun with my friends. I just don't want to, like, go crazy and be like, 'oh yeah, you guys, let's go have fun,' and then end up skydiving that day. You know, like, you have to make sure you have enough money to have fun, but have enough money to live the next day as well.

 

I try to put at least a hundred dollars away for fun money in the week, and half of my paychecks go into savings. The rest will go to bills. And if I don't have enough money to go to bills, then I take out for fun money and just eat peanut butter sandwiches for a week.

 

My kids are 8 and 5. I always teach them that saving your money for a rainy day will always end up being to your benefit.

 

FS: I reached out to a few experts to see what they had to say about Structured Savers like yourself. I know that Structured Savers are financial planners’ A+ students. But still I was curious if they’d have any advice for someone like Christina -- people who want to balance fun and practical investments, whether or not they have kids.

 

I started with Jeff Rose, a certified financial planner, and the author of the site Good Financial Cents Dot Com. Yes, that is cents as in money. Here’s what he told me.

 

Jeff Rose: An amazing quality of being a structured saver is that when you already know like where your money is going, you've removed a lot of the stress.

 

FS: What advice would you have for Christina?

 

JR: You know, she'll allots herself a hundred dollars a week for her quote-unquote ‘fun money’ and then she has a half of her check go to savings. And then at the end of the month when she doesn't have enough to pay the bills she doesn't pull that from her savings. She pulls it from her fun money. And I'm just like, wow, that's A+ with the extra credit like that.

 

But I would say that I would ask are there any things that she says she didn't do, like any things, any experiences with her friends that she could have done that she had more than ample savings to do that she didn't. Or now that she has kids, you know, what are some of those experiences with her kids that she can do with them now that she's not going be able to do for them in, you know, five or six years from now, when they’re teenagers and they don't want hang out with mom anymore?

 

FS: Yeah! Yeah, that’s a really good point.

 

JR: I love experiences, you know, and I if I get the one thing I've never done I still want to do either my wife does not want me to do because we have four kids now but I want to go skydiving.

 

FS: Yeah I’m with your wife on this one, Jeff.

 

JR: And like that's something that, reflecting back, I wish that I would have splurged on that activity. And I've seen a lot of people that have - they were so committed to saving and chasing this bigger number later on in life that they forgot to live the life in the moment.

 

FS: So Jeff, Christina actually says she doesn’t want to go crazy and be like, ‘Oh yeah, guys, let's go have fun and go skydiving.’

 

JR: She needs to! She doesn't know. But it sounds like she's done a great job of showing her kids what it means to save. But what are some of those experiences -- maybe a trip or, you know, something that they can do together -- that they will remember for the rest of our lives?

 

FS: You've just lit a fire under me about things I need to do with my children before they don’t want to be with me anymore!

 

JR: Skydiving.

 

FS: No, you have not sold me on that one, my friend. Jeff, thank you so much.

 

JR: It's been fun.

 

FS: So Jeff Rose says that you need to make sure that you’re having enough fun. I wanted to know if there was anything that Structured Savers could do to manage their money even better. I called up David Carlson, a personal finance blogger at the site Young Adult Money, and the author of the book Hustle Away Debt. This is what he had to say.

 

David Carlson: I would describe structure savers as very conservative, very concerned about it ever not having money, ever having to be stressed about money. And what's interesting about them is I think that's part of it too is they really want freedom. That's what they're shooting for. And freedom to them is having enough money to do whatever they want.

 

FS: David, are you structured Saver?

 

DC: I think I most relate to this group. Yes.

 

FS: Among your clients who fall into the structured safer type, what kinds of financial behaviors do you see them engaging in?

 

DC: I think a lot of structured savers are people who have a good handle on their finances. They're reviewing it. They're checking their bank accounts each month. They're looking at their transactions. Even going as far as being strategic about how much they set in different retirement accounts and maximizing their taxes. Really structured savers, they're the ones who are going to have that nest egg set aside.

 

FS: Are there any money saving tools that you’d especially recommend for structured savers?

 

DC: I'd say that most structured savers probably already did the research themselves but if they do work for an employer utilizing some of the tools available to them. And maybe some apps that help you save even more.

 

FS: Thank you so much for talking with us.

 

DS: Thanks for having me. I really appreciate it.

 

FS: Okay, so to recap: What do we know now about Structured Savers? What should you be doing?

 

First, don’t be afraid to take a financial risk or two. If you have the padding -- and you probably do -- consider making a higher-yield investment. It might be risky, but you can afford it. And it could pay off big for your future.

 

Second, you’re likely very retirement-oriented, and that’s great! But don’t forget to seize the day. Make sure you’re investing in experiences with your loved ones. Take advantage of the time that you have with them now.

 

Above all, keep on keeping on. You’re doing a great job.

 

So we’ve learned what it’s like to manage money as a Structured Saver. But to get the full picture of your financial situation, we also have to think about the stage of life that you’re currently in. What’s unique about being in your 20s? What’s hard about money right now? And what are the opportunities in front of you?

 

Out in the world, I also asked 20-somethings about their finances. I heard a lot of worry.

 

My personal financial situation could be a little bit better.

 

The worry focuses mostly on being able to pay my rent.

 

I'm not a financial contribution to my family the way I'd like to be.

 

I only got my associates degree. And I'm still paying off my student loan from like 6 years ago?

 

I'm always like waiting like when's the next time I'm getting paid, when's the next time I'm getting paid.

 

FS: This is the decade for starting out and, man, it’s not easy. You might have a steady job, or you might be living paycheck to paycheck. Good personal finance is a learning curve, and that learning curve can be steep. But everything’s going to be okay. You’ve got time. And right now, you get to focus on investing in yourself.

 

One woman I talked to was definitely feeling the crunch of managing money in her 20s. Here’s Leemore.

 

Leemore: My name is Leemore. I’m 29. Like many of us, I sort of live check to check. It's hard when, you know, sometimes you have periods where week after week, there's like $10 dollars in your bank account. And you're like, I'm not really going to have any new money until Thursday. But, you sort of learn to ride the wave. And then, the money comes in and it's just like a breath of fresh air.

Student loans are such a complicated topic. I had big dreams. I have big dreams. And I just went full steam ahead. And I'm so grateful because I will never say that I regretted that decision.   But, when you get out, you're like, how is this possible?”

 

FS: So now back to the experts. I reached out to Laura Adams, the host of the Money Girl podcast. She had some words of wisdom for Leemore, and for 20-somethings in general. Not everything she says might be exactly true of your experience. You might not have credit card debt or student loans, for example. But overall, Laura is worth listening to. She has some great financial wisdom to share. Here she is.

 

FS: So Laura, let’s talk about Leemore. What advice would you have for Leemore?

 

Laura Adams: Her priority has gotta be earning. She's got expenses and the student loans that are going to be they're not going to go away.

 

I am going to hope that she' s cutting expenses every way possible and probably she can trim a little bit more. But for her I would encourage her to really look into how she can increase her income. Maybe it means finding a different career. Maybe it means getting certified to do a different type of work. Maybe it means taking on a second job that's, you know, part time work. So that she has a little bit of free board and she can begin saving, building that retirement fund, and that will give her so much confidence.

 

And the reality is young people have such an advantage over somebody who is in their 40s, 50s,  60s because time is on your side and what that means is you can actually invest less because you have more time for it to grow and compound. So it's almost like getting your retirement at a discount.

 

I mean, literally putting away a few hundred dollars a month consistently from your mid 20s into your mid 60s can easily make you a millionaire when you retire.

 

FS: But you know I think she voices with so many people in their 20s voice which is I have big dreams. I have big dreams. And so when you give her very sage advice -- like maybe take a second career -- that sort of seems like stomping on somebody’s dreams.

 

LA: Yeah. And it is a bit of a reality check. So she's got to decide if you're talking about what your own is worth the stress that she's feeling. And it may be.

 

FS: What are the financial challenges and concerns that you see facing 20-somethings?

 

LA: Well I do think that credit cards are so easy to get and they're so convenient. I mean, you know, we buy everything online. When used properly, credit cards are one of the best financial tools that are out there. They help you build  credit. But they're also so easy to abuse. So have the understanding that if you use a credit card but if they you got to pay it off in full every month. If you can't pay it off in full, don't charge.

 

FS: What else is about being in your 20s is a particular financial concern.

 

LA: Student loans are a big issue for young people right now. They're graduating with, you know, high high levels of debt. I think it's like $25 - $26000 on average.

 

It is really difficult to get out of school and think, “Oh my gosh, now I've got all this all this debt.” But all in all a lot of cases, and I’d say the majority of cases, getting that degree does authority does help your lifetime earning.

 

FS: So what about the fact that for lots of people maybe for most people your 20s are a decade of just big questions without answers. You know whom am I supposed to be with. What am I supposed to be doing. Where should I be living. How do those big questions affect somebody's financial situation.

 

LA: It is. It’s a really formative time in your life, there’s no doubt about it. You’ll making decisions that will affect you for the rest of your life. And I’ll say that one of the biggest decisions that you may not think about as a financial decision per se, but the person that you end up with is the biggest financial influence in your life, either positive or negative.

 

FS: So did you hear that, 20-somethings? Who you end up with is a huge financial decision! Laura Adams says don’t take it lightly. Take a look at who you’re surrounding yourself with, and make sure they’re good, smart people.

 

Also, use this time to prioritize your earning potential. Maybe that means going back to school or taking on a side job. This is the time to start building your savings.

 

And if you take out a credit card, do so wisely. Go ahead and build your credit, but make sure to pay off that bill each month.

 

Last of all, we want everyone to know that if you’ve made mistakes or been out of balance with your financial choices, there’s no shame in it. Every financial expert stresses that it’s never too late. You can make meaningful changes starting today.

 

So whatever you do, or however you feel about money. No matter what age you are or behavior type you fall into, it’s okay. You just need to be conscious of the kind of person you are when it comes to your finances so you can grow, and more importantly be happy!

 

That’s all for this episode of MoneyMind.

 

Special thanks to our guests: Jeff Rose, David Carlson, and Laura Adams. And special thanks to Christina and Leemore for sharing their stories.

 

If you want to learn about money matters at other stages of life, or if you’re curious about other financial behavior types, check out slate.com/exploremoneymind.

 

You can also subscribe to the entire series wherever you get your podcasts.

 

And if you like the show, why not let people know by leaving us a good review?

 

I’m Faith Salie - thanks so much for joining us.

 

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