building your financial future: a road map for all ages and incomes
If you’ve ever thought about getting a financial plan but didn’t think you met the age or income requirements, you may be surprised to learn anyone can benefit from a financial plan. A financial plan can help you confidently track and plan your expenses for the future – and reach your big personal goals. Whether you’re in your 20s with the goal of buying your first home or in your 60s aiming for retirement, there is power in having a plan. 54% of consumers with a financial plan felt “very confident” they would meet their financial goals compared to 18% of consumers without a financial plan.1 Financial confidence is a powerful tool for all ages and incomes, and a financial plan acts as the road map to help you make the most of your money. Everyone’s financial journey is different and there is no right or wrong timeline – it’s simply a matter of learning your goals and what’s best for your financial lifestyle.
What a financial plan looks like in your 20s
Possible goals:
- Start building an emergency fund
- Payoff debt, like student loans or car payments
- Build your credit score
- Start investing into a retirement account, if even the smallest amount
- Consider home ownership
- Plan that big trip you’ve always wanted to take
42% of people believe they don’t have enough money to need a financial plan.2 If you’re in your 20s and think you don’t meet the income requirements to have a financial plan, think again! The truth is that it’s most beneficial to start planning early. It doesn’t take a lot of money to start a plan, and won’t require much time – just some thought into what your goals are and having the right advisor to help you get there. You can get started by meeting in person with a financial advisor, downloading templates to help your organize your finances, or using Insights, our money management tool within the First Financial Bank online banking platform, which allows you to upload your budget, sort spending by category, and set up goals to track your progress. No matter what those goals might be in your 20s – buying a home, paying off student debt, investing in your 401(k) – a financial plan will help you understand the value of your money and efficiently keep track of your cashflow.
When you meet with a financial advisor, they will help you map out your finances so you don’t have to worry about doing it alone or making a mistake. They may help by inputting all your financial information into a specialized software program, which showcases different scenarios in real-time and gives you the opportunity to see a holistic financial plan based on your choices. It may also highlight information you didn’t know about that would help you grow money over the years, such as tax-deferred assets or other liabilities. You’ll even be able to see detailed projections of your finances over the next 5, 10, and even 30+ years and factor in inflation and market changes to help make more confident and informed decisions. If you start financial planning in early in your career, your future self will thank you.
What a financial plan looks like in your 30s
Possible goals:
- Continue investing and compounding interest to plan for your future retirement
- Re-evaluate your budget – are you spending too much in a specific area?
- Look into investing more into your Roth IRA or a high yield savings account
- Pay off credit cards and other debts
- Start a college fund for your kids
Your financial goals may start to look different in your 30s versus your 20s. Maybe you’ve hit new personal milestones, like getting married, starting a family, buying a home, or advancing in your career. Setting up the groundwork and establishing a financial plan in your 30s will more than pay off in the long run. Whether you’re saving for your child’s college education, looking to create and stick to a budget, or building wealth with more investments, a financial plan is going to help you gain a greater understanding of your spending and offer insights into the future.
Some questions to consider in your 30s might be: What do your investments look like? What about total assets? Your current income? A 401(k)? Experienced financial advisors, like our Yellow Cardinal Advisory Group will sit down with you and answer any questions you might have. No matter which accounts or financial institutions your money flows in and out of, an advisor will help you find the right financial path. This means you don’t have to “wing it” or guess at what’s going to be the best fit for your future – your advisor will provide you with the best financial plan for you and your lifestyle, then map out a plan for the years to come. The best part? Your financial plan is a working document – not something you set and forget. It’s an active plan you’ll look at on a regular basis while periodically meeting with your advisor to discuss any changes. You’ll be able to re-evaluate your goals anytime and make adjustments to your salary, income, and assets. The job of a financial advisor is to help you stay on track no matter what life throws at you and ensure you do better every year.
What a financial plan looks like in your 40s and beyond
Possible goals:
- Pay off your mortgage
- Create an estate plan
- Look into life insurance
- Adjust your investment portfolio
- Maximize retirement contributions or HSA contributions
- Decrease expenses and/or downsize
As you go about your financial journey throughout the years, you may come to find you have equity in more places than you remember, such as your home, cars or recreational vehicles like RVs or ATVs, your estate, and more. You may also find that you’ve started to accumulate some assets you didn’t know about. When you have a financial plan, you can bring all of your finances together and look over the minute details you may have missed in the past. It’s also a good time to re-evaluate your goals and set yourself up for success as you approach retirement (it will be here sooner than you think).
One important aspect of financial planning is your 401(k). If you spend your career saving for retirement, you’ll want to be certain you’re putting the right amount into your retirement fund each month so you can comfortably retire. You’ll want to account for taxes, social security, assets, and much more, to ensure you have all the money you’ll need when the time comes. It’s definitely not too late to set up a financial plan in your 40s. A financial plan will help you keep track of this money and offer solutions for the best outcome. For example, a financial plan may show you contributing just 2% more into your 401(k) each month could end up being an extra $100,000 when you retire. Or you may find out working until the age of 63 offers a lot more financial freedom than what you expected when you were hypothetically planning to retire at 60. A financial advisor will help map out any what-if scenario and show you the best options for your future.
A financial plan offers a holistic view of what your financial situation will look like in the decades to come. When life changes, your financial plans will change too. Maybe you lost a job. Maybe you got a new job! Maybe you want to buy your teenager a new car, donate to specific charities, or send your grandkids to college…financial advisors will help you stay on track to retire, plan for emergencies, and keep your day-to-day finances aligned with your goals. The experienced financial advisors at Yellow Cardinal are focused on providing you a personalized plan based on your unique financial situation, always putting your interests first and supporting your financial journey for years to come.
Get in touch with a Yellow Cardinal financial advisor today and share your financial goals. An advisor will be in touch shortly to build strategies to help you reach your goals.
