As a newcomer to the financial planning industry in 2020, I have come to appreciate the importance and nuances of planning my finances to achieve my future and current goals. With 2021 upon us, and in the spirit of New Year Resolution making, I have made pledges to grow and improve my financial well-being and literacy in the new year. I plan on doing so in the following ways:
This past year brought great change to my life, having relocated back home to Massachusetts from New York City at the height of the pandemic and completing full-time graduate school. Since reentering the workforce, my income, monthly expenses, and my plans for the future look very different than they did a few months ago. In this last week of 2020, I am taking time to reflect on where I am, what I want to do, and what I am willing to do, financially speaking, to get there. This could include living at home with my parents for another few months if it means owning a home in the near future. (The home cooked meals are a plus, too!)
I have used a budget in the past, which usually revolved around how much “play money” I would have left after covering my living expenses each month. Especially after this year, it is important to consider saving money should unexpected bills or needs arise within the month or later in the year. I also want to prioritize ways that I can invest my monthly income and incrementally increase this overtime. A good way to start is to develop an excel spreadsheet or use a budgeting app like YNAB (You Need a Budget) or Pocket Guard that can classify your spending into categories, and help keep track of your recurring expenses. Of course, I do still want to remember to set aside some to enjoy!
This year, I am resolving to increase my understanding on the basics of investing and financial planning. To do this, I am exploring apps like Inkquiry and Money Experience to learn best practices in investing. I’m also setting up time with my financial advisor to think about ways that I can begin to build a portfolio that is appropriate and reasonable for my current financial needs and interest.
Every year I pick a worthy cause to focus my philanthropic energy towards. While this usually is in the form of direct community service, this year I also want to grow in my understanding of socially responsible investing. Companies that strive to improve their businesses and operations for the betterment of our world deserve the support of those with shared concern. I want to learn the most effective ways that I can support companies that are using environmentally sustainable practices: whether through directly investing in those companies or actively avoiding investing in companies without environmentally-sound practices. This type of investing can expand to many other social, political and environmental justice issues that are worthy of investment.
I usually follow the status quo when it comes to investing in a 401k—contributing minimal and along the same lines as my fellow young professional coworkers. I know now that financial situations differ and what is best for my colleagues may not be best for my needs. This year, I want to investigate many potential retirement contribution fund options. And I want to make sure that I can contribute the most that is appropriate for my current needs to better able me to live comfortably in retirement. It is also important to know your company’s retirement plans, ensuring that you are taking full advantage of any potential benefits like matching.
I would advise other young professionals to seek the counsel of a financial advisor, and it is never too early to do so. In fact, the earlier you begin planning the trajectory of your life and aligning it with your finances, the better you are able to achieve your goals. This year at Shepherd Financial Partners, our firm is resolving to help as many young professionals as possible begin their financial journeys. For more information on our offerings, explore our new Young Professionals webpage. Give us a call today to set up time with dedicated advisors, many of whom are young professionals themselves, with your best interest in mind.
May you have a safe and healthy New Years and success in your 2021 resolutions throughout the year!
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