Meet Jayla Wilson. At age 25, she is free of student loan and credit card debt, saving for retirement, saving into an emergency fund and on track to meet her financial goals. We all wanted to know how she did it, and after two interviews, I am honored to share what I learned from her.
But let's look back a bit. Like many young people, she came into the working world ready to excel, ready to be great at her job in banking, but dragged down by debt.
Jayla owed less than $10,000. To her, it was a daunting amount of money, but let's be real. The average student loan debt for Arkansas graduates is $33,300. Just in case you thought there was a decimal typo there, let me spell that out: over thirty-three thousand dollars.
Enrollments to higher education have been dropping, even pre-covid, and one school official lamented that students just don't seem to see the value in a degree anymore. Really? Is that the reason for lower enrollment? They don't see the value in a degree? Or do they see the value of the degree but not the value of starting off their life burdened with debt? For those who have the student debt loads near the state's average or higher, Jayla explained that "They see how much they owe and feel like they will never be able to pay it back so they just send in the bare minimum."
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Jayla's financial decisions began at age 18 when she was able to secure enough in scholarship money to allow her to borrow more reasonable amounts of money, which likely led her to feeling that paying her debt was achievable. I believe parents, loved ones and mentors can help coach students who don't have college savings to keep their loan balances low and to choose educational opportunities that are in line with current savings, grants and scholarships.
That brings me to one of my favorite pieces of Jayla's story: how she signed up for her company retirement plan at Southern Bancorp. She described her first day meeting with the chief executive officer of Southern Bancorp, Darrin Williams. He held out the paperwork for their 401(k) plan and wouldn't release it to her until he felt she understood how important it was for her to sign up for the plan and start contributing, right then. The company has a generous match, and he was insistent that she not miss out on it. Chief executives, human resource directors, retirement plan advisors, and co-workers are all part of this educational dream team that can and should challenge each new employee on their first day to start saving money with their first paycheck.
Jayla was also part of the Save10 movement, which works to get women to prioritize saving enough into their employee retirement plans so they can one day retire with confidence. Between her boss's urging and her awareness from being in the Save10 group, signing up for the retirement plan was a non-event.
I asked a little more about how people influenced her financial choices. "My parents were always open with me about their financial situation. I knew how hard my dad worked to take care of us and my mom watched their bank account like a hawk." Talking about money was clearly normal for Jayla from a young age. In my experience working with young people, often they will avoid the topic completely because "money was just not discussed."
Another reason young people can avoid the reality of money is the prevalence of credit cards. They are so available and easy to use and will conveniently show up in college mailboxes. Jayla pointed out that "as young people we tend to live above our means, using credit cards to pay for lavish lifestyles we really can't afford." This frequently begins the painful cycle that many of us in older generations know all too well -- the debt spiral.
What drives Jayla and her finances is generational wealth building. As she put it, "saving is the foundation of wealth building. It doesn't matter how much money you make if you're still going to spend it all." Jayla's advice for young people was to put pen to paper and create a budget. Her favorite quote is "A goal without a plan is nothing more than a wish." It's too hard to save and achieve financial goals like paying off debt, moving into an apartment, buying a house, etc. without a plan.
Jayla's decisions can inspire us all. Financial pain does not have to be a rite of passage. Let's all invest in the financial education of our young people by talking openly about money, dissuading them from taking on crippling student loans to go to college, and teaching them to save ahead for expenses with a budget rather than pay behind for expenses with credit card debt.
(Student loan data in this column can be found at: https://educationdata.org/student-loan-debt-by-state.)
Sarah Catherine Gutierrez is founder, partner and CEO of Aptus Financial in Little Rock. She is also author of the book "But First, Save 10: The One Simple Money Move That Will Change Your Life," published by Et Alia Press. Contact her at sc@aptusfinancial.com.