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Financial Planning for Millennials: Three Small Ways to Start

by Phil Tull | August 20, 2020 | Financial Planning

You may have heard the saying, “you don’t rise to the level of your goals, you fall to the level of your systems.” In other words – goals are great, but if you don’t have a system in place to achieve them, they’re just a nice idea. So, what financial goals do you have for your life? And perhaps more importantly – what systems or financial planning services have you put in place on a day to day basis to help you get there?

The term “Financial Planning” can often feel overwhelming for people of any age, but especially if you are just getting grounded in your professional life and feeling financially stable. But financial goals and the planning to get there doesn’t have to be huge and far out into the future. Here are a few financial goals you might have at this point in your life that don’t seem decades away:

  • Taking your dream vacation
  • Starting your own company
  • Purchasing your own home
  • Being financially independent from family members or credit cards

Now run that goal backward to today. What systems do you need to put in place right now that will help get you there? Here are a few small changes that you can work into your system that can have a massive impact.

  1. Just say no
    • To the extra drink or lunch out. Grab a water and be the hero DD. Bring a bagged lunch to work – it’s probably healthier than grabbing something fast anyways.
    • To the extra feature on a new car that you’ll probably never use.
    • To a new extra-large TV when you have a perfectly good one at home.
  1. Save now
    • Save small now so you don’t have to save big later. “Drip savings” (saving a little bit over a long time) is actually more effective than attempting to invest a large, lump sum. Think $50-$100/month into an IRA. Whatever it is – start NOW.
    • Saving $100 today is better than saving $200 in 30 years – make compound interest and dividends work for you.
    • Set a pace of saving that is sustainable today and stick to it, then increase it over time as you’re able. Don’t set your sights too high at first – if you feel too much of a financial pinch right away, you’re more likely to give up all together.
  1. Save often
    • Save $5 a day by turning down that drink, coffee or lunch out. You might even put a little piggy bank or jar in your house that you put that “saved” $5 into every day. At the end of the month you’ll have $150, now take that money and invest it!
    • Save $50 a week by opting for the car with fewer options and reducing your overall car payment, freeing up more money for you to pay down your debt or invest.
    • Save $100 a paycheck by setting up an auto-transfer into an actual savings or investment account of some kind. This may be an IRA, an employer-managed 401k plan or just a regular savings account at your bank. Keep in mind that IRAs and 401K plans can have tax benefits as well, so consider your options carefully.

Remember – don’t get overwhelmed by a big number or lofty goal. Create a manageable system or invest in financial planning services that help you reach your desired outcome. If you need help designing that system to help you reach your goals, consider talking to a financial advisor. Much like you’d use a realtor to help you buy or sell a house, or a mechanic to fix your car, a financial advisor is trained and skilled at helping you make the most of your hard-earned money. We’d be happy to meet you with you in person or virtually for a complimentary consultation about your financial goals and how we may be able to help. Give us a call at 757-436-1122.