Many people think you need to be rich to work with a financial planner, but that’s not true. It’s like thinking you need to be fit before joining a gym!
Even if Millennials don’t see themselves as wealthy, that shouldn’t keep them from seeking help from a financial planner. Financial planning is helpful when starting your career, paying bills, getting out of debt, and saving for the future. Your plan can grow with you as your financial situation becomes more complex over time.
Financial planners can also help you make tough financial decisions, reducing stress and giving you more confidence and time for other pursuits (like joining that gym!).
It’s never too early to start working with a financial planner to set yourself on the path to achieving your financial goals. Here are five reasons Millennials should ignore misconceptions and work with a financial planner before turning 30:
1. Understand Your Employer’s Benefits
After graduating, the next step is to get a job. A financial planner can help you evaluate the employee benefits package offered, beyond just the salary, so you can make informed decisions.
For instance, you’ll need to understand your employer’s 401(k) or other retirement plans. A financial planner can help you take advantage of these benefits by explaining your employer’s matching contribution, investment options, vesting period, and whether to do pre-tax or after-tax contributions, if available.
Your employer’s 401(k) is just the beginning. A financial planner can also help you understand other benefits like health insurance, health savings accounts, and group life insurance.
2. Save for a Rainy Day
A financial planner can help you manage your cash flow and improve your financial stability.
Can you handle a financial emergency? If not, you’re not alone. According to the FINRA Investor Education Foundation, 46% of people in the U.S. lack a rainy-day fund.
One of the first goals a financial planner will help you achieve is setting up an emergency savings fund to prepare you for income disruptions like job loss or illness.
3. Manage Your Student Debt
There is currently a record $1.7 trillion in outstanding student loan debt in the U.S.
As a Millennial, you likely have student debt, which may be a financial burden.
A financial planner can help you create a repayment strategy for your student loans. They can also help you compare debt consolidation options for student loans and other consumer debt, potentially improving your credit score.
4. Invest Wisely
Investing is a key way to achieve your financial goals. A financial planner can help you determine how much risk is right for you and help you understand your investments.
Working with a financial planner also means developing a portfolio tailored to you, helping you make decisions based on fundamentals rather than emotions. They can help you build a portfolio and automate your investments.
5. Own a Home
Saving and planning for what is likely the biggest purchase you’ll ever make is crucial. A financial planner can help you:
– Prepare to save for a down payment,
– Understand your mortgage options, and
– Create a homeownership budget that includes maintenance, utilities, HOA fees, insurance, and property taxes.
Life will present you with many decisions, and as a Millennial, you have decades of decisions ahead of you.
Working with a CERTIFIED FINANCIAL PLANNER™ professional can help you navigate tough choices. From understanding your employer’s benefits to buying your first home, a CFP® professional can offer investment guidance, portfolio management, and comprehensive financial advice covering both your big-picture goals and immediate needs. A CFP® professional is committed to putting their clients’ best interests first. Visit LetsMakeAPlan.org to find a CFP® professional who can help you.
