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Just Out of College? Time for Some Financial Planning!  |
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 So you’ve graduated from college and have started working in your field. It’s a very exciting time in your life. The world is your oyster and your future in an open book of possibilities. But there is another side to the story.
You also probably have a huge student loan and some credit card debt hovering over your head making you feel a little nervous about your financial security. Adding an additional expense right now may seem like a hard thing to do, but now is the time to start working with a financial planner to not only help you navigate your finances today, but also start helping you plan for the future.
Studies show that most young people don’t work with financial planners when they start out their careers. That is a huge mistake. The money you pay for financial advisor is nothing compared to the money you will lose, by not planning and investing your money properly.
Here are some things to think about as you consider working with a financial planner:
• They don’t do all the thinking for you. A financial planner is not a substitute for your own final decision-making. Planners serve as guides, editors and strategists. Sometimes they offer investments you may want to buy, but they need to be licensed to do that. They should begin by asking questions of you – plenty of them. Their purpose is to find out all the goals you have right now – and maybe determine a few you haven’t thought of. Some of these dreams might include buying a home or business for yourself, saving for college education for your children, taking a dream vacation, reducing taxes and retiring comfortably. Financial planning is the process of wisely managing your finances so that you can achieve your dreams and goals—while at the same time helping you negotiate the financial barriers that inevitably arise in every stage of life.
• They specialize: Planners, like any professionals, tend to specialize in certain areas of interest, and they may receive continuing education in more than a dozen areas of expertise. Certified Financial Planning professionals alone can earn continuing education credits in asset management, employee benefits, commercial real estate, insurance, investment management, estate management, retirement planning, 401(k) administration and health topics, among others. Plannersearch.org is FPA’s customized search Web site for planners in particular geographic areas with certain expertise. People in their 20s might want to start their search under “life planning.”
• They don’t all charge the same amount or in the same way: Planners charge for their services in a variety of ways. Some “fee only” planners charge for a consultation, plan development or investment management, and they may be charged on an hourly or project basis depending on the client’s needs or as a percentage of assets under management. Some charge commissions for the sale of financial products they are licensed to sell, and others have hybrid structures mixing fees and commissions. Younger people may want to discuss advisory services first before they commit to buying any particular products.
Information for this article provided by the Financial Planning Association (FPA).
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