The Case for Having a Financial Advisor in Your Twenties

The first time I ever sat down with my financial advisor, I was 22, my parents were seated on either side of me, and we were all discussing how to liquidate the bond they bought for me when I was an infant. Though this conversation was more focused than a general consultation would be, it didn’t take me long to realize how much I didn’t know about my own financial life. It had never occurred to me that a financial advisor could be useful to a 22-year-old recent college graduate who still hadn’t landed a full-time job.

When I really thought about it (and about how insanely broke I was), I realized that having a financial expert look me sternly in the eyes and tell me I didn’t need to go shopping for the third time this week probably wasn’t such a bad idea. Aside from simply holding me accountable and keeping me from making stupid financial decisions, I have learned a lot of useful things from meeting with my financial advisor once a month.

Financial advice is free!

This may not be the case for every investment firm, but many financial advisors make purely commission-based profits. This means that sitting down with their client and talking them through creating a budget or discussing which investments are the most beneficial is completely free of charge. So why not take advantage?

Budgeting is worth the time.

One of the very first questions my financial advisor asked me during our initial meeting was: “What is important to you?” Once we established that I most enjoy spending my money on traveling and gifts for my family and friends, we started creating a budget that accounted for these things. This was really exciting for me. I usually just ended up using my credit cards for these things in the past and suffered from it later. There are also lots of apps that make budgeting even easier, such as Mint and LearnVest — these really helped me stay on track by showing me a daily overview of all my income and expenses.

Now, instead of just “winging it,” I have a solid plan for every single paycheck I receive. And knowing that I will be fully prepared to spoil my loved ones for Christmas this year AND take a vacation next summer without breaking my bank is a pretty great feeling. 

It’s never too early to start investing.

In fact, your twenties is the best time to start investing small amounts of money, because you have plenty of time to make mistakes. Investing is an easy way to significantly increase your income with hardly any effort involved. Though it takes time to figure out the smartest way to invest your money, it’s not nearly as esoteric as it may seem.

When you have a financial advisor, they can help you make sure you are investing in the right places. Really, the only mistake you can make in the investing game in your twenties is to sit on the bench.

Emergency funds are important.

My financial advisor has told me that everyone should have an emergency fund that would allow you to pay all of your bills and get by without a job for at least three months. This is your “just in case” account—the one you never look at or steal from and basically pretend doesn’t exist unless something catastrophic were to happen.

Since I use direct deposit, my financial advisor told me that the easiest way for me to build my emergency fund is to have a set amount from each paycheck automatically go into a separate savings account. This makes the money less accessible and it’s easier to let go of it if I never really saw it in the first place. Even though it might seem far-fetched now that you might lose your job or end up in a debilitating car accident, you will be glad you have this fund if something like this were to ever happen.

You’re too young for mountains of credit card debt.

Most twenty-somethings have a bad habit of spending now and worrying about the consequences later. Credit cards can be very useful and beneficial for your credit score when they’re used correctly. However, when used incorrectly, they can be equally as harmful to your credit score and your debt accumulation.

Instead of spending the rest of your life trying to pay off your impromptu (and irresponsible) shopping sprees, your financial advisor will help you create a plan to get out from under your debt as soon as possible so you can start planning for your future.

Long-term goals are much more attainable when you’re young.

One of the best pieces of advice my financial advisor has given is: don’t wait until you have a mortgage and a family to start planning for your future. Do you want to retire by the time you’re 40? Do you want to be a millionaire by 30? If you figure out your personal goals now, then your financial advisor can help you figure out how to start making steps towards achieving them.