5 Financial Tips for Young Professionals

Greg Addison | 7-19-2018

Financial planning doesn’t have to be associated with stock market investing or the management of diverse assets. The key to planning successfully is to establish a sound process and stick to it.  If you are a young professional, here are five financial tips to help you start climbing the financial ladder.

  

1. Set Some Goals

Keeping a goal in mind allows you to remind yourself what you’re working towards. Whether it is saving up for a better vehicle, building up a college fund for your kids or just looking to save a little extra cash, keeping the end in mind is key.

Having a goal however, is not enough. Find a way to track your progress so you can continue to manage it. Remember that what doesn’t get measured, doesn’t get managed.

 

2. Live Within Your Means

Everything begins here. You may have a goal, but if you don’t live within your means, having the goal means nothing. Minimizing costs where you can and being honest with yourself with respect to your finances is the very first and most important step when it comes to being financially responsible. Your standard of living will probably not be the same as it was while living at home with your parents. Costs and expenses that you didn’t have to worry about while living at home can add up quickly and be overwhelming once you are out on your own, so it’s critical to your success to stay disciplined.

Find little ways to cut back and save some extra cash. For example, start by eating out one or two times less a week, shopping at discount grocery or clothing stores, and buying more generic items as opposed to name brand for more commodity-like purchases. Also, avoid the high interest rate credit cards that are easily available to young professionals. These interest rates can quickly escalate debt.

 

3. Take Advantage of Your Employer’s Benefit Plans

Many employers offer benefits in forms of health, dental, and vision insurance as well as retirement accounts. Take advantage of these offerings. Financially investing in your future paycheck-by-paycheck will create compounded gains over time. Experts encourage contributing at least10% of your pay to your retirement savings, however, this may not be feasible when starting out as a young professional. If it isn’t, contribute at least 2% to 3% or as much as it takes to receive any match offered by your employer. Starting now and sticking with it is vital. You will thank yourself years later. 

 

4. Use Technology to Your Advantage

Technology has become an inevitable aspect of today’s society, so why not use it as a resource? A bevy of apps are out there to helpyou keep budgets under control, set reminders, create shopping lists, and even offer online coupons/deals right from your phone.

Another useful tool is using an online “autopay” feature at your bank. This resource is fantastic and allows for all your important bills to be paid on time, all the time; but make sure funds are available in the account to cover the autopay withdrawals.

Helpful apps include: 

 

5. Find a Budget/Method that Works for You and Stick to It

There are various way to budget and it’s crucial to find a consistent, simple method that fits your lifestyle. In the end, it all comes down to three basic steps:

  1. Pay your bills on time
  2. Save your money (Savings accoung, 401(k), IRA, etc.)
  3. Have fun with what you have left

Too often, people reverse steps two and three which prevents them from having enough money to fund their future or retirement. As a young professional it can be tempting to prioritize having fun instead of budgeting and setting a portion of your income aside for retirement – don’t fall into that trap. Even if you can only spare a bit of your income to invest in a retirement plan at this point in your life, it’s amazing how much that wealth will grow over the course of your career. Start now and don’t ever quit!

 

Questions? You can reach Greg Addison at
1 (800) 821-7715 x142, or via e-mail at gaddison@lewer.com 

 


Lewer Financial Advisors, LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for general information purposes only, and is not intended to provide, and should not be relied on for tax advice, legal advice or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Lewer Financial Advisors is a multi-state registered investment advisor domiciled in Missouri.   
Lewer Financial Advisors is a member of the Lewer group of companies.
Greg Addison

Author: Greg Addison

Greg Addison is the Senior Vice President of Lewer Financial Services, LLC. Lewer Financial Advisors is a corporate Registered Investment Advisor, specializing in both personal wealth management and institutional retirement plan consulting for the individual investors, business owners, dealers, retailers, and franchisees who know The Lewer Companies well.