Most of the time when people hear the term “financial planning” they think of retirement planning. If you’re in your 20’s and 30’s, you may think retirement is too far in the future to even consider meeting with a financial planner. However, the reality is, there is much more to financial planning that can benefit young clients. Financial planning can be done in every stage of life. As young clients begin their financial journey, there are transitions and changes to work through such as new jobs, paying down student loans, starting a business, buying a home, marriage, or starting a family.

Early in their career, young clients can benefit from education on how to make the most of their earnings, manage their cash flow, and develop good habits. Working with a financial planner can help clients wade through the differences and importance of employer sponsored retirement plans, such as 401(k)s, 403(b)s and stock purchase plans, and other retirement vehicles like IRAs and Roth IRAs as well as after-tax investment accounts. Education on what type of account to start contributing to given your current situation and goals is a great start to maximizing cash flow. By further understanding the ins and outs of their cash flow, young clients can better determine when they will be able to afford that new car lease, vacation, apartment, or first home purchase. If such a goal is important enough, are they willing to reduce spending on other things? Developing good spending and savings habits from the beginning can tremendously help decision making in the long run.  

A second step further in cash flow management is debt management. As more and more individuals enter the work force with student loans, debt management becomes an integral part of financial planning for young clients. With so many types of loans out there, figuring out what is required and how to tackle the loans can be overwhelming. Which loans should be paid first or consolidated? Planning can be done to help clients understand their options and create a repayment strategy.  

In financial planning, it is important to protect what you have, and as young clients get married and start families, it may become increasingly important.  There are more issues and individuals added to the equation that need to be considered.  Planning can be done to help young clients make the most of their employer provided benefits such as life insurance, health insurance and disability insurance.  Is the employer offering sufficient, or are there gaps that need to be filled?  Building a strong foundation from the get-go can help mitigate the likelihood of a financial crisis down the road.

Financial planning encompasses a wide variety of topics, many of which are not mentioned here, and none of which fit a perfect mold each time.  For a complimentary consultation, contact Sharkey, Howes & Javer at 303-639-5100 to discover more about the services we offer.  

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