Contributed by: Kelsey Arvai, CFP®, MBA
Let’s face it: life moves fast. Back-to-back meetings, inbox and voicemail full, and trying to squeeze in a workout or some semblance of a social life. It’s no wonder financial planning often gets pushed to the bottom of the to-do list, especially for busy professionals.
Busy professionals understand that their financial future isn’t some far-off idea. They see in real-time how their future is being shaped right now with every decision they make, every dollar they spend, their job, their family, and several elements outside their control and purview.
Luckily, all you need is a plan and to stick to said plan.
This guide was created for the ambitious, over-extended, high-achieving professionals who want their money working as hard as they do.
Know Thy Numbers. Understand what matters and what doesn’t. What matters: your net worth, your savings rate, your monthly cash flow, and your progress toward your big-picture goals. With Financial Freedom as the goal, the way you get there is slowly over time. It’s decisions that compound (either upwards or downwards) that will set you in the direction you’re going.
Automate Often. Learn Your Plan. Automation is a busy professional’s bestie. Consider setting up auto-transfers for bills, savings, and everything in between. You might start with high-yield savings, even if it’s $50 bucks a paycheck—choose an amount that you will never have to stop saving until you have at least 3 to 6 months of spending in cash. It’s prudent to consider deferring at least up to the employer match (typically 4%) to your employer retirement plans (401k, 403b, etc.). Work your way up to saving 15-20% of your total household income, even if it’s by increasing your deferral by 1% each year until you max out your retirement plan. Utilize target date funds based on your age 65, set it, and then forget it. Understand your benefits you want to understand how your money is being allocated.
Taxes Are Cool! Tax planning is a year-round adventure. Every financial decision we make has some tax implication (for better or worse). Tax strategies can impact the longevity of your plan and help to ensure that your money lasts as long as you do or increase your probability of accomplishing your legacy goals.
Protect Yourself. The root of your plan should be defined by what you feel is success—whatever that looks like to you. Ensure you have appropriate insurance coverage to protect against unexpected losses. Regularly review and update policies as your circumstances change.
DIY Only Sometimes. There is power in delegation. Hiring a financial planner to create a personalized strategy for you and keep you accountable. More importantly, we are here through every change, expected or unexpected.
Financial Planning is not about perfection; it’s about intention. So, take pause often and ensure you are heading in the direction that YOU want to go. And if not, take the steps to course-correct with courage, clarity and probably a spreadsheet or two.
Kelsey Arvai, MBA, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kelsey Arvai, MBA, CFP®, and not necessarily those of Raymond James.
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through the Center for Financial Planning, Inc. The Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.
401(k) and 403(b) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.
Matching contributions from your employer may be subject to a vesting schedule. Please consult with your financial advisor for more information.