So You Have Your First Job after College: It’s Time to Engage in Financial Planning

What is financial planning?

Financial planning is the ongoing process of evaluating your current financial situation, establishing specific short and long-term life goals, and creating an individualized roadmap to realize those goals. 

Because effective financial planning is a multi-year process it is best to begin as early as you can. No matter if your starting salary is modest, connecting with an advisor, beginning regular contributions to retirement accounts and preparing for future milestones and challenges all lead to better outcomes.

How to start planning your finances

The most effective way to start planning for your financial future is to:

• Begin by researching financial planners. This should include having conversations with those whom you identify. It's critical to determine whether you have a good rapport and connect with a planner before you engage with them.
• Organize your financial information. Include your assets as well as your debts (rent/mortgage, loans, etc.) and any tax returns you've already filed.
• Establish a responsible budget and stick to it! If you're not sure what budget is right, make this conversation a priority with your financial planner.

Making an informed decision often means leaning on an expert. But once you've aligned on a plan that makes sense, it'll be up to you to follow through.

Research financial planners

Start by gathering the names of potential financial planners. Check with friends, family members or trusted business associates for referrals to financial professionals who have effectively helped them.

Certain planners may have more experience working with clients in a specific profession — such as medicine or law — and they recognize the unique financial situations that accompany those positions. Research and meet with advisors to find someone who understands your and your family's needs and who can deliver personalized solutions toward meeting your long-term financial goals.

Organize your financial information

Ahead of the first official meeting with your planner, organize your financial information so they can develop a clear understanding of your current and expected circumstances.

This may include documentation such as:

• Income documentation (pay stubs).
• Financial statements for investments (401(k)s, bank accounts, brokerage accounts).
• Debt statements (mortgages, credit cards, car loans and personal loans).
• Insurance policies (homeowners, automobile, life, health and disability).
• Estate documents (wills and trusts).
• Employer benefits package details.

Think about the future, too. What does your ideal retirement look like? What home ownership goals do you have? What does financial security mean to you?

The answers to those questions may not be fully formed yet, or they can shift over time, but your advisor can develop a strategic financial plan that guides you to your current goals. It is far easier to adjust accordingly as your life evolves than it is to start the process at a more complicated future point in time.

Follow your financial plan

This step can be the most challenging. You must follow through on the plan you develop alongside your advisor.

Contribute to your retirement accounts. Stick to your budget. If you do not follow the strategies and tactics that your financial planner recommends, the process will not be successful and you will jeopardize your ability to reach the goals that you established. Consistently following your financial plan is one of the most important steps to achieving long-term financial goals.

Ensure you remain on track by scheduling and maintaining regular meetings with your advisor to monitor progress, consider beneficial adjustments and bring up any concerns about the current trajectory. It is all about building trust for what can be an enduring relationship that creates long-term benefits.

Frequently asked questions (FAQ)

• Q: When should you start financial planning?
  • A: It’s best to start financial planning as early as possible — even at the beginning of your career. Starting early empowers your savings with more item to grow and it helps you build strong financial habits.
• Q: Why is starting financial planning early important?
  • A: Starting early allows you to take advantage of compounding growth, better positions you for major life events, and reduces financial stress over time.
• Q: Do you need a financial advisor to start financial planning?
  • A: While not required, a financial advisor can help you build a structured plan, identify opportunities, and avoid common mistakes — especially as your finances become more complex.
• Q: What is included in a financial plan?
  • A: A financial plan typically includes budgeting, saving, investing, retirement planning, insurance coverage, and setting long-term financial goals.
• Q: How often should you review your financial plan?
  • A: It's a good idea to review your financial plan at least once a year – or whenever you experience a major life change such as a new job, marriage, or home purchase.