It’s easy to think of financial planners (and the people who use them) as wealthy, middle-aged, and grey haired. Luckily for young people everywhere, that’s far from the whole story. If you believe that you don’t make enough for financial planning to be relevant to to you, or are putting it off as one appointment you won’t have to worry about until years down the line, think again.
It’s a myth that only “older” or “wealthy” people can afford or need a planner. In fact, when you’re young and working hard to establish yourself and build financial stability it’s more important than ever to have the proper tools, motivation, and know-how to make every dollar work harder for you. You don’t have to be a huge earner (yet!) to set yourself up for a strong financial future!
Much of financial planning is just that — planning. Planning for your future, for your goals, and for the life you want right now. And while financial planners can provide guidance and assistance for people at any age and place along their financial journey, there’s a lot to gain from starting early.
One of these most concrete benefits is compounding interest, which is the phenomenon where the interest you earn on your initial savings goes on to earn interest itself, and so forth. It’s the closest you can come to free money in the real world without risking losses as well. Even a small amount in the right account can increase greatly over time, compounding your original savings simply by existing. In this case, time really is money, and the sooner you start the more you’ll make! See for yourself how powerful it can be by playing around with a compounding interest calculator.
Compounding savings allows many people to achieve large goals that may otherwise be out of reach, whether it’s retirement, launching your business, or buying your first home. The longer the timeline you have to plan for major life goals, the less of a burden they will be for you.
We sit with so many older clients who regret not setting up a financial plan earlier in life. At their age, they cannot realistically attain their goals — there is simply not enough money saved, nor enough time to accomplish it. Some older people who are looking for insurance coverage find that it has now become too expensive, or they have simply become uninsurable.
With the right plan and only a small portion of your income devoted to savings, you can avoid regrets like these later down the line. There’s always room to increase your investment when you have the means later, but there is no way to recoup the benefits of starting small and starting early.
It’s not all about planning for your future, either! We’re not only here to help allocate your money into savings and investments; a huge part of our role is to provide real financial education. It’s become second nature to google everything — I’m as guilty of this as anyone. There’s a lot of great info out there, but at the end of the day some things just require a professional. It’s the difference between going to see a real doctor and putting your health at the mercy of WebMD, or between hiring a lawyer and representing yourself with advice you got from a legal blog. A lot of clients drive themselves crazy with conflicting and incomplete information on the internet, and end up right back where they started, but with less data and less space on their phones after downloading ten redundant budgeting apps.
A good financial planner can take a personalized look at your full financial picture with all its nuance and quirks and give you the support you need to reach your needs and goals. We can help you understand where your money is going, and how you can make it go further. We can “diagnose” your bad financial habits and help you develop excellent financial skills that will serve you for the rest of your life. Even careful budgeters are often missing out on the ways you can make your hard-earned money work harder for you right now. Most importantly, we can set you up with the skills and resources to take control of your financial life from here on out.
Working with a financial planner, if only for a few hours, can be a powerful investment in your financial health and future, and you’ll be able to reap the concrete returns for years. It’s never too soon to get the most out of your money, and you don’t have to figure it out alone.