Financial Planning for Millennials

At this stage of life, you may be focused not only on the long-term goal of saving for retirement, but also on immediate goals, like paying down student loans or other debt, buying a home, and setting aside money for fun things like vacations. Financial planning will help you reach your goals.

Strategies for financial planning

Financial planning is important no matter how much money or income you have. It's about setting realistic goals and targets and then figuring out the best way to reach them. Basically, it's a road map that will help you get where you want to go.

At this stage in life, your financial plan should have three main parts:

1. Managing debt to achieve freedom and flexibility
2. Saving for financial security in the immediate future
3. Investing for long-term future growth

You might focus on one or another part of your financial plan depending on your situation at a given time. For example, if you have credit card debt, your first priority should probably be paying that down. On the other hand, if you don’t have any emergency savings at all or haven’t started saving anything for retirement, it may be wise to work on saving some money, even $500–$1,000, before you pay down your debt. Once your credit card debt is paid off, you can start saving and investing more money. The key is to make a good plan and stick to it, allowing for adjustments along the way.

This is the first in a nine-part series of articles on financial planning for millennials.

1. Strategies for financial planning
2. Setting goals
3. Paying down debt
4. Setting up an emergency fund
5. Saving and investing for long-term goals
6. Diversify your investments
7. Tips for staying on track
8. Insurance
9. Getting help

Other resources

• Financial Wellbeing Toolkit
• Achieving Financial Wellbeing learning modules

Melanie Hardie, MA, CFP®, AFC® is a Certified Financial Planner, an Accredited Financial Counselor, and has a Master’s degree in psychology.