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Last month, a teacher at my school asked what kind of advice I would give her son and daughter-in-law concerning money. They just got married recently and are in their early twenties.

This is what I wrote to them. Does anyone have any other suggestions?

Dear Andrew and Carissa,
Your mom asked what type of financial advice or information I would give to two young people just starting off. I teach with your mom at Nolan, and I really like financial stuff. My name is Monica and I am 29 years old. My husband, James, and I will be married for three years on Tuesday (he's also 29.) When we were dating, we made some long-term life and financial goals.

1. When I was growing up, my mom stayed home with my sister and me until my younger sister was in high school. I knew that I wanted to stay home with my children at least until they were in school.
2. We wanted to be Financially Independent. We both like to work, but neither of us wants to have to work.
3. We want to be able to send our children to college (and Catholic grade school.)
4. We don't want to have to worry about money.
5. After 5 years of marriage, we would like to have at least a $250,000 net worth.

In order to accomplish these goals, we would have to do some planning and lots of saving and investing. We decided that I would work for 5 years after we got married to try to save lots of money. This means putting off kids for 2 more years. I'd kind of like them now, but I want to stay home with them, so off to work I go!

Jamey and I are frugal by nature. We would be happier eating at Taco Bell than Outback Steakhouse. I love to save money at the grocery store, and I usually won't buy things unless they are on sale. This type of living is called LBYM – Living Beneath Your Means. Based on our incomes, we could eat at Outback at least twice a week, but we choose not to. We could drive new or leased cars, but instead drive used Saturns (with an extra one in the garage for emergencies and vacations.)

We purchased a house right before we got married. Jamey and I had saved up enough money for a 20% down payment. Our goal was to pay down the mortgage ($135,200) as quickly as possible. So far, we have refinanced twice. We currently have a 10-year mortgage at 5.375% with a balance of $100,463. We have decided not to prepay the mortgage anymore, as we feel that the stock market would be a better place for our extra money.

After three years of marriage, our net worth is approximately $232,000. We are only $18,000 away from our 5-year goal. We don't make tons of money, either. I am a teacher, and he's a treasury analyst. Our incomes are approximately equal. My sister and her husband make almost double what Jamey and I do. Yet, they spend money like it's water.

My advice to you would be this:
1. Make some long and short-term goals.
2. Talk about your finances. Have an understanding of where you are at and where you would like to go.
3. Learn about money – spending, saving, and investing. There are tons of financial websites out there. My favorites are:
a. - this site has information about everything financial. There is a mini-seminar called “Couples and Cash” that looks at goals, budgeting, investing, and lots of other stuff.
4. Save money. Make sure you contribute to your 401(k) with each paycheck and Roth IRA every year. You really need to figure about how much you will be able to save. Look at your income and necessary expenses. With the extra income, you should put money in your 401k up to your employers match. Then, in my opinion, put the next $3000 of savings into each of your Roths. Then go back and finish maxing out your 401k. Any money after that could be used to start college funds, taxable investment accounts, or put in your emergency fund.
6. Don't accumulate any credit card debt. Jamey and I charge, but then we pay off the balance each month.
7. Use the library. We go each Monday night and check out lots of books. I always look for new stuff in the financial section.

Here are some books that are really worthwhile to read:
Debt-Proof Living – Mary Hunt (and anything else by her)
The Millionaire Next Door – Stanley and Danko
Jamey recommends something by Peter Lynch or a Motley Fool book (

I wasn't really into investing until I met Jamey. I also hadn't always been very good with my finances. Together, though, we had a vision of what we wanted our lives to be like. That's what we are setting out to accomplish.

Good luck!

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