For the past four months, Em and I have been on the road traveling around the US. The majority of our days are spent thinking about what we are going to see, where we are going to sleep, and whether or not we have enough water in our tanks to take a shower!

But before becoming a full time RVer, I worked for 3.5 years in Financial Aid at the University of Maryland and thought a lot about Student loans and personal finance for people in college and for young adults. My dad was a financial advisor for 30 years and my brother Trent is also a financial advisor, so personal finance is a big topic within my family as well.

I am by no means an expert in personal finance, but after talking to countless students and recent graduates about their financial situations I found that there were two main things that I kept saying over and over again.

1. Limit Student Loan Debt

In my time working in financial aid for a state university, one of the biggest lessons I learned was a simple one. Borrow as little as you can, at the lowest interest that you can, and pay it off as fast as you can. As simple as this advice sounds, it is amazing how many incoming freshman just look at the school they want to attend and don’t consider the total four-year cost or what types of loans they are taking out. According to Student Loan Hero, the total outstanding student loan debt in America is $1.4 trillion. The average loan debt for current graduates is more than $37,000. And it’s a lot more than that for many students.

Unfortunately, a lot of the students that I talked to already had a lot of debt, and it wasn’t very helpful to tell them to try to avoid taking out too much in student loans. Which is where my second point comes in.

2. Invest Early

So what if you are graduated and already in debt?

The money that you have now is more valuable than it will ever be in the future. Which is why it is so important to start saving that money to pay off your debt and start Investing as soon as possible. The more you pay off now, the more money you will have to invest for the future. And investing at a young age can be a huge payoff!

To prove just how important it is to invest at a young age, J. P. Morgan made an awesome chart that helps shows the difference of someone who starts investing at 25 versus 35.

In this example, Susan invested $5,000 a year from ages 25-35 and Bill invested $5,000 from ages 35-65. So Susan invested a total of $50,000 and Bill $150,000. But because Susan started investing at an earlier age, by the time they both turned 65, Susan actually made $61,000 more. And if she would’ve invested $5,000 a year from 25-65, she would have turned $200,000 into more than $1 million!

Albert Einstein (who was a pretty smart guy :) said that compound interest is the eighth wonder of the world. The best way to explain compound interest is to look at all your student loans. You know how if you borrowed $37,000 at 5% interest (right now the federal loan interest rate is 3.76%, but it used to be 6.8% in 2008) and paid it off over the course of 10 years, you’d actually end up paying back more like $47,000ish? Well that extra $10,000 you have to pay back is thanks to compound interest. Imagine if you flip that and, instead of having to pay an extra $10,000 after 10 years, you actually make that money just by investing?

Like I said, I am definitely not an expert in personal finances and wouldn’t want to try to tell you where to or how much of your money you should invest. These are just a few simple generic things that I realized a lot of students found helpful to be reminded about. Of course, there are a lot more helpful specifics like how to save, participating in 401(k) employer matching, and knowing where to invest your hard earned savings. But for that type of investing advice, you would definitely be better off talking to a professional advisor like my brother Trent.

Trent works for uFinancial and could do a lot better job at creating a specialized investing plan to meet your specific goals. If anyone is interested in getting professional guidance about where and how to start investing, feel free to give him a call at 717-682-0529 or email him at [email protected].

And then, of course, when you become wealthy and need some help to spend all that extra money…feel free to give me a call and I will be sure to help you with that! ;)

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