"It's never too soon to start thinking about saving for retirement," proclaimed Michaela Cavallaro last Tuesday to a room full of groaning seniors at the workshop "Beyond Bowdoin: Living on Your Salary and Building Wealth after Graduation."
While many seniors are faced daily with questions like, "What are you doing after graduation?" and "Do you have a job yet?" Michaela Cavallaro, a freelance writer specializing in finance, began last Tuesday's workshop by asking a different type of question: What are your concerns about life after college?
"Getting laid off," contributed by one audience member, was supported by a chorus of other fears, including managing the expenses of city life and "figuring out how to start a business."
"Beyond Bowdoin" seemed to be an especially appropriate event considering the ailing state of the job market and the limited prospects many seniors are facing after graduation. Approximately 30 students attended the workshop, which was held in Moulton Union's Main Lounge.
Cavallaro advised the audience to "make sure that your spending is in line with your priorities because that's really easy to get out of whack."
In order to practice prioritizing, each attendee took about 10 minutes to complete a worksheet which outlined the average expenses for a young person living on a $30,000 a year salary in Portland, Maine. The worksheet forced attendees to think about choices, like whether to have a roommate or not, whether to buy groceries at Hannaford or Whole Foods, and whether to take a trip to Boston or rent a movie instead. The atmosphere was relaxed as students compared notes; most participants came out with a little money to spare.
She warned seniors to anticipate the difference between budgeting in college and in the "real world" where "the safety nets get a little farther apart." She suggested writing down all expenses and categorizing them in order to find out exactly "where the money goes." Tools like Quicken and Microsoft Money can help with this task.
Cavallaro tailored her advice specifically to recent graduates and stressed the importance of saving immediately.
"You can make a really significant difference in your long-term finances when you invest at a young age and that's mostly because of compound interest," she said.
She had plenty of recommendations about how to save, including taking advantage of the free financial planning and 401(k)-matching benefits many companies offer employees.
Cavallaro was followed by William Lund '77 who focused his talk around "helping [seniors] to avoid the negative." As the Superintendent of the Maine Bureau of Consumer Credit Protection, his job is to "help people for whom things have not gone the way they intended."
Above all, he warned the audience to always be alert when dealing with their money.
"If they say 'I'm here to help you,' they're not. They're here to help themselves," he said.
Lund stressed caution when dealing with the now ubiquitous credit card. He cited the 1960s and 1970s as a time of truth in lending and fair credit reporting, but differentiated that "the only rule about credit cards right now is that there are no rules."
He recommended that students use credit cards issued by local banks because "where there's face-to-face contact there's accountability. And there's very little of that in the credit card industry."
He highlighted the importance of reading the fine print "with a magnifying glass."
"There's a reason that fine print is fine," he said. "It's because someone doesn't want you to read it."
He advised that students pay off their student loans as soon as possible and discouraged the audience from co-signing based on a romantic relationship: "One word: don't," he said.
The workshop was well received by attendees.
"It was helpful," said senior Willy Wilder. Rather than providing an "exact procedure" for his future spending, Wilder said Cavallaro and Lund "answered questions that I had, and now I know what I need to think about, at least."