Investing in the Financial Future of Young Professionals

Written by Samuel Swanson, Joint Base Charleston, CYP Steering Committee Member

Financial stability is the foundation for a successful career. Yet, from 2010 to 2016 alone Charleston’s average monthly rent increased by 49% while median household income saw just a 12% increase. With the rising cost of living, many young professionals are being forced to reevaluate their current situation and ask the tough questions about financial wellness. So the Charleston Young Professionals hosted a panel discussion, featuring three accomplished financial advisors, to better equip young professionals with the financial tools and expertise they need to succeed.

Financial Goals: A Goal Without a Plan Is Just a Wish

Many people have financial goals. Whether it be to buy that beautiful house down the street or save an additional $10,000 this year, everyone has areas where they want to improve financially. But if you were to ask them about their plan to achieve those goals, most people would be tragically lost. The three panelists agreed that this is a common problem they’ve experienced throughout their years of financial advising. “A goal without a plan is just a wish,” one panelist added. Establishing specific, measurable goals is only part of the journey. The other half is developing a meaningful plan to help you take the first, second, and third steps needed to find financial success. One panelist suggested using an accountability partner. An accountability partner, they explained, is someone who meets with you every month or every quarter and holds you accountable for your goals. It is someone who can be open and honest with you, even if the truth can be tough to hear. Finding a friend, coworker or family member who is willing to hold you accountable for your goals can go a long way in helping you achieve true financial success.

Key Takeaways: Develop specific, measurable financial goals. Find an accountability partner. Have a plan and stick to it.

Home Buying: Don’t Feel Pressured

To buy or not to buy, THAT is the question. Every Charleston local seems to have an opinion when it comes to renting vs buying. But when you are being flooded with unsolicited advice it can often be difficult to make a clear financial decision that’s best for you. The panelists cautioned against feeling pressured into such a big financial decision. When one member of the audience complained about feeling pressured to buy a house in the Charleston market the panelists were eager to offer some advice. “Don’t feel pressured,” said one panelist, “there’s no shame in renting.” Another added that many young people plan on relocating within the next few years, in which case renting a home or apartment may be better suited for their long-term goals.

Understanding the costs of owning a home is a critical part of making a smart and well-informed decision. Before signing on the dotted line, ensure that you understand the costs associated with your new home including realtor closing costs, property taxes, repair and maintenance, etc. In addition, planning ahead and making sure you have an emergency fund ready, even after big financial purchases, helps ensure you’re prepared in case something unexpected comes up like a medical emergency or major vehicle repair. Buying a home is a big decision and, through smart and responsible planning, you can make a decision that’s aligned with your long-term goals.

Key Takeaways: Don’t feel pressured into making a big financial decision. Understand the costs associated with home ownership before buying. Have an emergency fund to help prepare for unexpected expenses.

Investments: Before You Invest, Talk to Someone

Investing is another hot topic that often involves a never-ending wave of unsolicited, and sometimes uninformed, advice from friends and family. The best way to make smart investment decisions is to stay informed. “Before you invest, talk to someone,” one panelist recommended, “but someone who truly understands your goals, situation and timeline.” Not all advice is reliable, so make sure that it’s applicable to you and your situation. The panelists also encouraged everyone to consider retirement options. Asking if your employer has a 401k match or a ROTH 401k can go a long way in helping to ensure you’re ready for retirement. One financial advisor emphasized the importance of considering your timeline when making investment decisions. For example, if you are expecting a big purchase coming up in a few years, like a new home or car, then investing conservatively in low-risk investments can help protect your future plans and avoid any unexpected shortfalls.

“You can’t invest if you can’t save, and you can’t save if you’ve got crippling debt,” one panelist said. Managing your spending habits and paying off debt quickly can help empower you to make the investments you want down the road. All three panelists agreed that a common mistake is spending money first and then saving what’s left over. Setting aside a designated amount of your income every month and managing your spending habits will add up quickly. Working on the fundamentals of financial wellness can lead to bigger investment opportunities down the road and set yourself up for success.

Key Takeaways: Talk to someone you trust before making a big financial decision. Plan for retirement. Manage your spending habits to create greater financial flexibility.

The advice and mentorship offered by the three financial panelists was well received by the young professionals. The audience appreciated the importance of financial wellness and were eager to learn from the best when it comes to smart financial planning. Through the success of this event and others hosted by the Charleston Young Professionals, the next generation of business leaders are now better prepared to succeed and serve the Charleston community. 

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