Although I’m not a spendthrift, I feel as if I never have enough money in my bank account. Because I’m setting aside cash in order to buy a new home, I’m always searching for ways to decrease my monthly expenses. Fortunately, through my research, I’ve found some great, simple tips that provide substantial savings over time. For instance, I turn off my HVAC unit whenever I’m traveling. I also conserve gasoline by running all of my errands for the week on the same day. On this blog, I hope you will discover some easy, painless ways to lower your regular monthly bills. Enjoy!
If you've recently graduated from college or graduate school and secured your first job, you're likely excited at the transition from paying to attend college classes and do homework to being paid (and being provided benefits) for the same type of work. Although you may still be focused on paying down the student loan debt accrued during your college years or finally upgrading your standard of living a bit, the financial choices you make at this point in your career could set the stage for the rest of your life. Should you begin saving and investing on your own or consult a financial planner? Read on to learn more about the best financial decisions you can make when starting out in your career, as well as some situations in which a certified financial planner (CFP) could help you reach financial independence even more quickly.
What should your first financial steps be upon obtaining your first 'career' job?
Even if you've worked on a full-time basis in the past, getting a steady job in your career field can provide you with even more opportunities to secure your financial future than ever before. Many companies will offer a 401(k) (or its public-sector counterparts, a 457 or 403(b)) for pre-tax contributions to your retirement funds, with some companies even matching the amount you contribute up to a certain threshold. If your company doesn't offer one of these plans, you may instead be able to contribute pre-tax funds to a traditional individual retirement account (IRA) or post-tax funds to a ROTH IRA.
Regardless of the type or tax treatment of retirement plans available to you, saving as much as you can as quickly as you can is key. Under the "Rule of 72," dividing the increase in earnings (or dividend rate) of your investment into 72 will provide you with the number of years it will take to double your current contribution. This means that if you're invested in products that earn an 11 percent return, your money will double every 6 to 7 years, while investing in products that return 3 to 4 percent per year will mean it takes closer to 20 years to double your investment.
When do you need a financial planner to help you achieve your goals?
When you've just started your first career position, you may not feel you have any need for the services of a CFP, associating these planners with clients who are closer to retirement. However, starting strong can be key when it comes to financial freedom, and spending your twenties or thirties investing in products that don't provide the expected or desired return can leave you feeling like you're spinning your wheels. Whether you want the financial flexibility to retire at an early age or are hoping to support a more luxurious lifestyle on your investments, having a consultation with a CFP can lead you toward the products you'll need to steer the Rule of 72 in your favor.
To learn more, contact a company like Global Wealth Consultants LLC.
Share1 July 2016
