A twenty-something electrician, registered nurse, and engineer walk into a financial planner’s office . . .
No, not the beginning of a bad dad joke, though it is tempting.
As a financial planner it is all too common to meet with young adults attempting to kick start their financial lives only to find that they are strapped with school debt, employment that does not match their degree, or a starting salary much lower than expected. Often the reality off the back side of college doesn’t quite rise to the promise of their well-meaning high school counselor. How can a parent help their kids navigate college and career decisions.
The young electrician who walks into the financial planner’s office is likely learning his trade on the job or through an apprenticeship. This means they started drawing an income right away and are less likely to be looking at student debt. Demand for the trades is high and projected to remain high. The lack of debt may allow them to buy a home and start a family earlier and they may have access to a pension plan. If your child would rather be in the shop than in the class, it may indicate that the trades are the place for them.
Choose an appropriate path. The registered nurse entering the office has secured some training. There will be some cost to this training, but this can be managed. According to nurse.org, the cost of an Associate’s Degree in Nursing (ADN) can vary from $10,000 – $40,000, while a Bachelor of Science in nursing (BSN) can cost from $37,600 for public school to $150,400 for a private institution with room and board.
With this wide range of costs, it is important to ask what type of school is needed? While parents often like the idea of their kids enjoying the “college experience”, the difference between living at home and attending a local state school and flying across the country to the ‘reach’ school may be a hundred thousand dollars. With the demand for RNs, will the choice of schools have that much impact on the likelihood your child will get a good RN job?
Moderate your expectations. While ZipRecruiter may have told the engineer that the average starting salary was $69,362, this is only an average and varies with location. In Muskego, WI it is $65,316, while in Merrill, WI it is $75,274, however there may be more jobs available in Muskego than in Merrill.
This also varies with type. A Geospatial Engineer starts at $41,956 while an electrical engineer starts at $72,904. And remember that these are averages, so they may experience a higher or lower actual starting salary. Now subtract from that starting salary the cost of paying off student debts, and your discretionary income is even lower.
What’s a parent to do? Think outside the box!
- Know your kid – Is a degree right or should you encourage the trades?
- Swallow your pride – While it is not as exciting to tell your friends your child is going to the local state school, it may be much better for them than the ivy league school on the coast.
- A gap year, while not exciting, may allow your child to save up and get a head start on paying for college, while learning more about themselves.
- Living at home while attending school will save a significant amount of college costs.
So back to the twenty-something electrician, registered nurse, and engineer walking into the financial planner’s office. Which one is better off?
We don’t yet have enough information to judge, but it will be the one who chose the most appropriate career for their personality, took the appropriate path, moderated their expectations, and thought outside of the box. But done right, each one has an equally bright future ahead of them.
