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Millennials: 5 Reasons to Work with a Financial Planner Before Turning 30

There is a general misconception that you need to be wealthy before working with a financial planner. That is far from the truth. Imagine thinking that you need to get fit first before you join a gym!

While many Millennials may not consider themselves “wealthy,” that shouldn’t stop them from working with a financial planner.

Financial planning can help when you are just getting started in your career and trying to pay your bills, get out of debt and save for the future. And your financial plan can grow with you as you get older as your financial life becomes more complicated.

Financial planners can also help guide you through complicated financial decisions, so you can have less stress, more confidence and more time to focus on other things (like joining that gym)!

So, it’s never too early to work with a financial planner to get on the path to reach your financial goals. Here are 5 reasons Millennials should ignore the misconceptions and work with a financial planner before turning 30:

1. Understand Your Employer’s Benefits

After graduation, the next step is to get yourself a job. A financial planner can help you evaluate the employee benefits package that is being offered beyond the salary, so you can understand the benefits and make an informed decision.

For example, one of the main things you’ll need to understand is 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, the investment options within the plan, the vesting period, and whether you should do pre-tax or after-tax contributions, if offered.

Your employer’s 401(k) is just the starting point. A financial planner can also help you understand other employer benefits like your health insurance plan, health savings accounts, group life insurance and much more.

2. Save for a Rainy Day

A financial planner can also help you manage your cash flow so that you manage your finances better.

Do you think you can survive one financial hiccup or emergency? If not, you are not alone. According to the FINRA Investor Education Foundation, 46% of individuals in the U.S. lack a rainy-day fund.

One of the first things a financial planner will help you achieve is having an emergency savings fund that can prepare you to withstand disruption in your income, like a job loss, illness, etc.

3. Manage Your Student Debt

There is currently a record $1.7 trillion dollars in outstanding student loan debt in the U. S.

As a Millennial, there is a strong chance that you currently hold student debt, and it may be too financially burdensome.

A financial planner can help you create a student loan repayment strategy. They can also help you compare debt consolidation options for student loan debt and other consumer debt. These actions very well may lead to improved credit scores.

4. Invest Wisely

Investing is one way to achieve your future financial goals. A financial planner can help you determine how much risk is appropriate for you and help you understand your investments.

Another benefit of working with a financial planner is developing a portfolio that is tailored for you, with help to make decisions based on fundamentals, rather than emotions or fear of missing out. A financial planner can help you build a portfolio and automate your investments.

5. Own a Home

It is very important to save and plan for what is likely the largest purchase you’ll ever make. A financial planner can help you:

  • Prepare to save for a down payment,
  • Understand your mortgage options, and
  • Know how to work out a homeownership budget that addresses everything beyond mortgage payments (maintenance, utilities, HOA fees, insurance, property tax, etc.).

Life will present you with many decisions to make, and as a Millennial, you will have decades of decisions ahead of you.

Working with a CERTIFIED FINANCIAL PLANNER™ professional can help you navigate tough decisions. From understanding your employer’s benefits to buying your first home, a CFP® professional can offer investment guidance, portfolio management and holistic financial advice that covers your big-picture financial goals as well as your immediate financial needs. What’s more, a CFP® professional makes a commitment to CFP Board, as part of their certification, to put their clients’ best interests first at all times when providing financial advice. Search LetsMakeAPlan.org to find a CFP® professional who can help you.

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Topics
Young Professionals Financial Planning 401(k) Retirement Plans Budgeting Student Loans Investing Mortgages