Financial Planning for Young ProfessionalsSubmitted by Lifetime Wealth Strategies on August 1st, 2022
Your 20s are often seen as a true coming of age when financial responsibility opens up the possibility of turning your dreams into reality. You’re settling into life after university, paying off debts, and starting to really define who you are as a person. But with bills, rent, keeping up social appearances, and other pressures, financial planning is often pushed to the side.
Instead, you may need to take a different approach to your financial goals than previous generations. But what can you do without potentially hurting your future?
Excess cash that’s sitting around is begging to be spent on impulse purchases. Instead, investments, even small ones, have the potential to grow over time. Assess where you can minimize expenses to free up investment money that may benefit you in the long run. Set a goal based on your income and goals and go from there.
Long-Term vs. Short-Term
Being able to start saving for retirement in your 20s can be beneficial, but it doesn’t have to be the be-all-end-all. You may also want to set money aside for your shorter-term goals, like paying off student loans, saving for a down payment, starting a family, or traveling. Once you’ve identified your goals, you can build a plan to save for the long-term while still giving yourself the freedom to enjoy life in the moment.
And as for retirement planning, see if your company has an RRSP contribution program or another retirement plan, and try to contribute an amount that will allow you to take advantage of any potential employer match.
Consider Diversifying Your Portfolio
It’s generally believed that attaching yourself to individual stocks opens you up for risk. Spreading your investments across numerous stocks may lessen the impact market volatility can have on your early investments.
Keep in mind that diversification does not ensure profits or protect against losses in declining markets.
Continue to Educate Yourself
The world of investing can be intimidating. But by educating yourself, both on your own and by consulting with a financial professional, you can build your understanding of investment jargon and keep yourself informed.
This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.