Print Posted on 08/12/2017 in Financial Planning

Financial Planning For Millennials

Financial Planning For Millennials

Financial planning for millennials is different than other generations. Where baby boomers valued home-ownership and retirement, millennials value lifestyle and travel. And instead of working one stable job for 40 years until they retire, millennials appreciate the personal independence that may have them work three different jobs in three different cities in a span of three years. Although the times are different, the idea that you need to get your finances in order to support your life goals still holds true. Because last we checked, those music festivals and trips to Europe don’t pay for themselves. To be young and fun, there needs to be money working behind the scenes to support your lifestyle, vacations, and other goals. And just because many millennials don’t value retirement as much as other generations, doesn’t hide the reality that someday they’re going to need money to live on when they stop working. Retirement comes for everyone (eventually). So although they won’t have the same immediate goals as their parents or grandparents, millennials can still benefit greatly from financial planning. Here’s how.

Ways Millennials Can Benefit From Financial Planning

Financial planning isn’t only for older people who face retirement are around the corner. Millennials can gain a great amount from working with a financial advisor in their twenties and thirties. For example, a financial planner can help them with their: Debt - Should you pay the minimum amount, something in the middle, or the maximum amount of your loans? Many millennials are strapped with debt from college loans or credit card spending. A financial planner can give you a strategic plan to knock out the debt in the best time-frame for you. Savings - Advisors can analyze your income and expenses to find practical solutions to increase your savings. It’s a whole lot more peaceful to get away from the paycheck to paycheck lifestyle. You shouldn’t have to worry about if you can afford rent or your car payment this month. Saving extra money keeps your finances in order and away from an emergency. Spending - Desiring to spend less money on unnecessary items and doing it are two different things. Having a financial planner discuss ways to spend less on the purchases you careless about opens up your finances to spend on what you do care about, while also paying down debt or saving money. Investments - Don’t know the difference between your company’s 401(k), IRA, and Roth IRA investment options? A professional with years or decades of experience will be able to explain all of those options and point you toward the best investment based on your goals. Investing money is how you get your money working for you. Future plans - Whether it’s moving across the country, buying your own place in three years, or saving up for a wedding, an experienced financial planner puts you in the driver’s seat to reach your future plans. It can get complicated to effectively evaluate how many resources and how much time is needed, that’s why a professional provides value here. Career advice - While less common, a financial planner can even help a millennial get paid what they’re worth. Because financial planners know that Increasing your income is a great way to boost your financial success, they may suggest you ask for a raise or take a new job to increase your salary. Essentially, working with a financial planner will help you get the most out of your income to reach financial freedom sooner.

What To Look For In A Financial Planner

As a millennial, there are many qualities to look for in a financial advisor. Sure, it’s a good idea to include their certification, personal referrals, and other qualities into your decision process. However, you can’t go wrong when your advisor understands you and your goals, will hold you accountable, and is trustworthy. It’s key that your advisor spends the time to listen to you to understand where you’re coming from and what you’re looking for. Show me a bad advisor and I’ll show you one that doesn’t understand their client’s uniqueness and individual goals. That’s why a red flag would be an advisor who spends almost the entire conversation talking and doesn’t give you the chance to voice your goals, opinions, and concerns. The best advisor and client relationships resemble a team or partnership. It’s not the financial planner dictating orders to the millennial. That’s not appealing to millennials, and anyone. So ideally you tell an advisor your lifestyle goals, and then he or she works with you to achieve them. That’s a solid partnership. Next, having a plan is one thing, but where you’re going to achieve results is through executing. For example, say you have $7,000 invested in a Roth IRA. When the markets are down 10% and you call your planner telling them you want to sell, a solid advisor will remind you of your goals and why you shouldn’t make decisions based on emotion. Plus, you’ll most likely avoid costly fees and grow your money with a financial planner who holds you accountable to executing your plan. So look for a financial planner that will hold you accountable when you’re not up to the task. Lastly and most importantly, you have to trust your financial advisor. Trust is the foundation of any relationship, especially one that involves your money. The best way to get a feel for them is to meet them in person. During the meeting, look for clues about how transparent they are. Someone who guarantees too good to be true returns in a certain stock or fund is misleading, because no one knows how the stock market will perform. And a good advisor will tell you when they’re not an expert on a topic like insurance, instead of trying to talk their way into an acceptable answer. The bottom line is you’ll get closer to financial freedom when your financial planner is understanding of you and your goals, holds you accountable, and is trustworthy. Want to get started with financial planning today? You can find a quality financial planner near you through the search tool on our homepage.