In the months – and even years – after you graduate from college, you’ll face a slew of financial decisions that you likely haven’t encountered before. It might be your first time managing a large sum of debt (ahem, student loans), the first time you’re living on your own, or even your first time managing a large paycheck. Whatever your individual situation is, you’re likely to have questions. After all, personal finance 101 isn’t a required college course.
If you’re a recent college graduate and have questions around the following five topics, you may want to hire a financial advisor.
Related: Do You Think You Need a Financial Advisor? Start Here
How to Make a Plan to Pay Off Student Loan Debt
According to an analysis of January 2022 census data, about one in seven Americans have student loan debt… that’s about 45 million Americans. Let this be a reminder that you are not alone.
After graduating from college, you’re forced to face the reality of your debt… which can feel overwhelming. Although it’s perfectly normal to stress and feel swamped in a mountain of debt, inaction can create more problems for your future financial health.
A financial advisor can come up with creative strategies for student loan payoff, while also keeping you on track as the months and years pass by through regular check-ins. Plus, your financial advisor can keep you updated on federal student loan forgiveness legislation, including if you qualify and how to apply.
Related: What We Know About The Student Loan Debt Relief Plan
How to Create a Post-Grad Budget
Now that you’re leaving an institution of higher learning with a diploma in hand, you’re likely entering the workforce or searching for a job in your field. With that new job comes appropriate compensation, which may mean a higher income to budget.
With a higher income comes the impulse to spend it… no matter the new costs you’ve acquired in this new period of life (think: housing).
Hiring a financial advisor in this post-grad period is a crucial step to establishing smart money habits that can pay off over a lifetime. Many of these habits will begin with budgeting – or creating a spending plan – that is realistic and meets your personal goals.
How Much Should I Save for Retirement?
When your career is just beginning, the last thing you’re thinking about is retirement, right? At this point, it seems so far away… But the sooner you start saving for retirement, the better off you’ll be. That’s because of the power of compound interest – interest on top of interest.
That said, creating a plan to make contributions to retirement accounts (early and frequently) will allow you to see the significant impact that compound interest will have on your portfolio’s overall performance.
A financial advisor can not only help you determine how much to save for retirement, but also provide insight on the ideal accounts for your individual situation – including evaluating if your employer-sponsored 401(k) plan is enough.
How Much Should I Invest?
If you’re a recent college graduate that did not complete a degree in the financial field, you’re probably new to investing and have a lot of questions like:
- How much money should I start investing with?
- How do I get started?
- What are some of the best investment strategies for beginners?
A financial advisor can not only help you answer these questions, but also take the burden of managing investments off of you. One important note here is to make sure that you work with a fiduciary financial advisor, here’s why.
How to Determine and Prioritize Financial Goals
There’s probably a ton of goals you have that we haven’t mentioned on this list. Whether you want to travel frequently, own a home, open a business, start a family, and so on… a financial advisor can help you realize your goals and create a plan for you to start working towards achieving them.
Determining your most important and timely financial goals will help you effectively prioritize your dollars toward them month after month.
Financial advisors can offer even more suggestions for recent college graduates as they enter this new and exciting period of their life. Implementing financial planning strategies now will only set you up for a better future, so don’t wait any longer.
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