Broker Check

Meet Sally Starter

December 02, 2020

When I tell people I’m a financial planner, I typically get one of two responses:

What does a financial planner actually do?

 I don’t think I have enough money to work with a financial planner.

Both are fair questions.  Over the next few weeks, I’m going to introduce you to 4 typical people/families/business owners that we work with and what that process looks like.  I’m also going to introduce you to some new and improved ways to work with us.

First let’s meet Sally Starter.

It’s always a pleasure for us to work with a client just starting out their career or to have an existing client ask us to work with one of their children who have recently graduated.  While my hope is that we have already done some work with the children to lay the groundwork for a solid financial plan, meeting with an advisor prior to or right at the beginning of your first job can provide huge benefits.

Sally is just starting out her new career, and her head is likely spinning.  She is excited to have a new job, incredibly happy with her new colleagues, but obviously busy trying to learn everything that is needed to be successful at her new job.  Figuring out the right choices to make for her employee benefits may not be a priority.  Sally will most likely have many questions…. should I contribute to my 401K?  If so, how much?  What about the ROTH 401K option? Should I go with the high deductible health care plan?  What about adding additional life insurance through the group benefits?  The choices that need to be made can be overwhelming.

Not only are the choices overwhelming, but there is also a glaring hole in our education system when it comes to financial literacy.  My son is a high school freshman this year and financial literacy is an elective that was available to him, so he is signed up for next semester.  I’m interested to see exactly what that entails.  While I don’t have anything against tectonic plates and cumulonimbus clouds, understanding the tax differences between a ROTH and Traditional IRA, as well as things like Health Savings Accounts are important things to know.  Until the past few years this type of education has been left to us as parents.   

The first thing we would do at our meeting would be to help Sally figure out what her goals are and how to prioritize them.  With most young professionals such as Sally, there is one goal and one goal only…. pay off my student loan debt as quickly as possible!

It is an understandable priority, which too often people try to accomplish by putting every free dollar towards paying the debt off.  Like everything else, however, student loan debt needs to be planned for and prioritized within the framework of a more comprehensive plan.  It’s no secret our students are graduating now with the largest college loan debt in history.  In addition, they are job searching in a pandemic-stricken market, making debt the largest source of financial stress. But what we all need to keep in mind is there are other things you need to plan for.  A perfect example it is to build and preserve a proper emergency fund. Should you encounter a large, unexpected expense such as a car or medical issue, can you get through it without incurring credit card debt to join your student loan debt?  Yes, student loan debt is a burden to bear and it’s something that we want to strategically pay down as quickly as possible, but not so aggressively that we leave ourselves vulnerable to racking up credit card debt and causing cash flow issues along the way.

While its normal for student debt to be top of mind, there are typically a multitude of financial issues which Sally Starter will need to address and discuss.  We will review the importance of having a cash savings/emergency fund to be able to deal with the unexpected issues that life tends to throw at us.  The student loan debt issue is not going away, but by creating a plan with a time frame, I have found it helps to bring peace of mind to many of my younger clients.  Finally, having a thorough understanding of the terminology that is used in employee benefits can go long a way in helping make proper choices for an individual.

The goal of our first meeting is to help Sally create a solid foundation for a financial plan.  We will prioritize her goals, set budgets, establish time frames and set the proper allocations to accomplish those things.  Most important, it will give Sally the peace of mind to focus on her new career. By succeeding at work, it will hopefully mean increased salary and achievement of the financial goals we set even sooner.

There is a thought that somebody needs to have a large amount of investable assets to work with a financial planner.  I can tell you with Birds Eye that simply is not true.  I offer several different ways to get the type of planning that you need or prefer.  Check out our website for different ways to work with us.

Feel free to share this with anyone you think it could help.  Stay tuned next week for Mary and Mike Midlife.