Savings, Investing & 403 B Advice Rarely Changes: So Why Do We Forget it?

Advice my dad gave about 403 B & 401K savings still holds up today

I would regale my friends in college by reading my father’s letters out loud to them as we were getting ready to go out for the night or were procrastinating study time. Sometimes they were three pages typed—harsh words on how I better “shape up or ship out”.  After college and early in my career, friends would come to dinner or hear me recount stories of my father’s continued advice and off-color jokes.

While there is much I outright disagree or debate with my father (politics, raising my sons, religion for example), he has sage advice when it comes to career, money and 401k and 403b distributions and savings that has served me well. Given the pandemic, economy, social unrest and social re-awakening we are experiencing right now, I felt it was worth re-visiting that advice. Given my firm’s focus on employer-sponsored 403 b plans, I also wanted to add my thoughts and share it outwardly so others who are experiencing job fears, career transitions, money woes or other decisions might benefit. So here goes the top five, with expanded details as you scroll down the article:

  1. Save and Invest Automatically - You Will Miss It Less.
  2. You Cannot Turn Down a Job You Were Never Offered.
  3. Avoid Borrowing On Your Credit Card – The Fees Alone Make It Difficult.
  4. Wait…and Go Without Until You Can Afford to Pay for it.
  5. The 6 P’s - Prior Planning Prevents *iss Poor Performance

“Just put a little in your retirement account each month and you won’t miss it. If you start now and live on the income minus your retirement savings, you will budget to that number.” - My Father's Advice

1.  Save and Invest Automatically—You Will Miss It Less.

I graduated from college in a recession and had trouble finding a salaried job. I moved back in with my parents and took a series of temp jobs while searching for my “career”. I finally found an entry-level job, moved into my first shared apartment and started paying bills. After setting aside money for rent, transportation to and from work and utilities, I had little left over for myself. When my father asked if I was going to participate in my new employer’s 401k plan, I said “No, I can barely afford rent. Retirement is a long way off.”  My father’s advice was, just put a little in your retirement account each month and you won’t miss it. If you start now and live on the income minus your retirement savings, you will budget to that number.

I begrudgingly agreed to save and chose a basic index fund at the time. I occasionally monitored my retirement account, but it wasn’t until I took a job on the front lines of Financial Services that I started paying more attention. I realized within five years that my investment had grown and compounded. I was on my way to building a nest egg.  To illustrate the power of compounding interest on your 403b or 401k Plan consider these two scenarios:

Scenario 1: Ally graduates from college and begins investing $5,000 every year for the next ten years in her employer’s 403b Plan, then stops.

Scenario 2: Christina waits ten years after graduating from college to invest $5,000 every year for the next 29 years in her employer’s 403b Plan.

So who has more money when they are both 60 years old assuming at least 6.2% in return?

Answer: Ally! She invested early and it compounded.

It is hard during this pandemic to imagine saving for retirement when you are either out of a job or worried about the future of your job. We will get through this pandemic and the economy will improve at some point. If you have a job, continue saving for retirement. If you are looking for work, focus on that for now and you can return to saving again once you have your job.

According to The Federal Reserve SHED Survey, 44% of non-retired adults say that their retirement savings are not on track [1]. This news is troublesome and why we need to focus even more on financial education and financial literacy for every adult. Over half of California private sector employees (54%) do not currently own a retirement savings account or participate in a pension.[2]

“44% of non-retired adults say that their retirement savings are not on track.”
— The Federal Reserve’s Survey of Household Economics and Decision-making (SHED)

In addition, we cannot always count on being able to work as we grow older. From the same Federal Reserve Survey, it cites that 40% of people who retire at age 61 or earlier do so because of health reasons.

2. You Cannot Turn Down a Job You Were Never Offered. 

I know this sounds like I am stating the obvious, but it has been interesting to hear friends, who have been in the workforce for over 25 years, hesitate when it comes to pursing a job. Even in this COVID-19 job market!  I will listen to their ten reasons why they should not pursue this job further and why they should not make any big moves during a pandemic.  

A pandemic is a great time to make a move. Why? Because everyone else is distracted or staying the course out of fear or risk aversion. If it turns out the new offer is far less attractive, then you can always turn it down (which makes for an even stronger negotiating standpoint). You cannot turn down a job that you never pursued, however and you cannot get rejected if you never try.

3. Avoid Borrowing On Your Credit Card—The Fees Alone Make It Difficult.

Again, it seems like I am stating the obvious, but with the plethora of available cards from every retailer and bank out there, it can be easy to fall into the trap of “I’ll just pay it off next month” or “I’m sure I’ll get that raise/bonus/tax refund and I can pay it off then”.  Meanwhile, you have spent an additional 7% to 23% of that purchase on interest.

In my last six months of college, I borrowed on my credit card. I found myself unable to pay off the balance and I had no job. My father’s viewpoint was that I needed to learn a hard lesson on what it would take to pay off the debt. He was right. It was painstaking but I paid it down over a two-year period and I vowed to never try that approach again. During the course of my work at Fairlight Advisors, I meet individually with 403b and 401k Plan participants. I have grown worried about the increasing amount of debt of many Americans. I find many are struggling with student debt, while others struggle with credit card debt due to the high cost of urban living (especially in the San Francisco Bay Area) and with the lack of financial literacy around savings and debt management. I also believe we need a better approach to the affordability of higher education, but that is for another post.

According to a WalletHub study on credit card debt, “Americans began 2020 owing more than $1 trillion in credit card debt after a $76.7 billion net increase during 2019.”[3] However, the first quarter of 2020 had one of the highest credit card pay downs at $58 million. This was likely due to the stimulus checks received as well as decreased spending due to the pandemic. Q’2 of 2020 marked the first time in more than 30 years that credit card debt dropped between April and June. Anecdotally, I found that many of the 403b plan participants I met with this summer to discuss their personal financial planning questions (and the occasional 403 b Distribution), were paying down their debt due to lower costs associated with working from home and not socializing as much.

According to WalletHub, the average household’s credit card balance is $7,938 but this is below the Q’4 2007 average household’s balance of $10,398.[3]

“Q’2 of 2020 marked the first time in more than 30 years that credit card debt dropped between April and June.” - — WalletHub Study

4. Wait…and Go Without Until You Can Afford to Pay for it.

This advice goes hand in hand with number 3 above. When I had my first job, I mentioned to my father that I wanted to buy a new car. I indicated that I could take a loan out for it. He estimated that I would spend $100 a week on a new car with loan plus interest. Mind you, this was in the early 90’s so assume car prices have increased a lot since then. After taxes, retirement savings and rent, this wasn’t going to leave me much in income to pay for other expenses.

I didn’t really want to hear this but once I started looking into the cost of parking a car, I slowly came around to the idea of using public transportation for the environmental impact reasons, and renting a car when I needed one. Now this advice may not be practical for some people who live in areas without good public transit or who have jobs that require driving or children to take to/from school or daycare.

But this illustration can be used for other things we really want but may not necessarily need. Several years ago, I wanted to visit a friend who was living in Bogota, Columbia. I had agreed with another friend that we would visit in the new year. However, when the time came to begin planning the trip, I realized I did not have the savings needed for the trip due to unplanned housing expenses the prior quarter. I would have to pay for the trip on my credit card and wait a few months for a work bonus to pay it off.

I ultimately declined taking the trip. While I felt bad having to tell both friends that I could not visit, it was not a necessary expense and I could wait. I made a plan with my husband and we took the trip the following year.

It can be hard to grapple with the desire to spend on something that will make you happy or temporarily reduce your stress. According to the APA’s 2020 annual report “Stress in America”, 70% of adults surveyed reported that the economy was a source of stress during this COVID19 impact.[4] This statistic is on par with the 2008 survey findings of 69% during the 2008 recession and higher than the 46% reporting during the 2019 survey. To combat these feelings of temporary relief from spending or taking a “carpe diem” attitude about taking on debt, try these approaches:

  • Make one financial decision at a time so as not to overwhelm your brain and increase stress levels.
  • Find an accountability partner. Whether it’s your best friend, co-worker or financial advisor, work with an accountability partner to focus on budgeting.
  • Track your spending. If you have a sense of where you’re spending your money, you might notice where you can “give up” a few things in order to focus on a purchase that will bring happiness or reduce stress.

5. The 6 P’s - Prior Planning Prevents *iss Poor Performance.

After I made a frantic phone call home during college to ask my parents for more money or I was going to bounce a check, I got a long letter from my Dad on the benefits of planning and getting organized.

I have come to realize over the years that financial planning can reduce stress. I wrote a more extensive blog post here talking about it. I specifically talk about the health problems and illnesses that people have related to financial stress. Companies actually lose productivity time when their employees have financial worries.

In the course of working with nonprofits at Fairlight, I have found that many of their employees struggle with financial stress, often related with the lower wages associated with nonprofit work and the high cost of living in urban areas where many organizations operate. If you are an HR manager at a nonprofit or a for-profit organization and you can influence your benefits selection, I suggest you take a look at HoneyBee. This organization is focused on giving employees access to financial education, tools and loans without the high fees of personal loans or credit cards.

According to HoneyBee’s “Financial Wellness Programs in the Workplace” guide, “46 million Americans have wiped out their emergency savings due to COVID-19”.[5] This is a real dilemma for many families right now. Seeking help is crucial before taking on more debt or loans.

If you are an individual who is struggling with financial worries, seek the help of a financial planner. The Financial Planning Association offers pro bono resources. Often you can meet with a financial planner for an initial free consult. Having a plan will improve your results or prevent *iss poor ones as my father likes to say.

As a parent myself now, I find myself sifting through the advice my parents gave me and focusing on the pearls of wisdom to pass along. I was heartened that my 16-year-old son received a letter from his part-time employer about contributing to the 401k Plan. Without prompting, my son said “I would like to contribute”. After I nearly fell out of my chair, I realized that they do listen and learn - much like I did, albeit begrudgingly at times.

Related: Investing in Women: Good for Business or Just Good?


  1. The Federal Reserve: Survey of Household Economics and Decision-making (SHED).
  2. A report from the Center of Labor Research and Education, University of California Berkeley,
  3. A WalletHub 2020 Study:,billion%20net%20increase%20during%202019.
  4. American Psychological Association, Stress in America 2020 Report:
  5. HoneyBee, Financial Wellness Programs in the Workplace, An Employer’s Guide, Q’4 2020: