Keys to Early Financial Planning

Keys to Early Financial Planning

You’re just starting out. You spent a long time in school preparing for this moment. This may be the first time you’ve had a good amount of money left over after paying your bills, and you hope it only goes up from here.

It’s an exciting time, to be sure, but it can also be overwhelming and confusing.

Where do you start in building a smart financial plan? Here are the basics and a checklist as a starting point for a visit with a financial professional.

Make investing a priority.
You’re young, which means you automatically have one of the investing world’s biggest advantages on your side: Time.

Few young people fully exploit this advantage. A long timeline between now and retirement gives you greater freedom and flexibility in the investing choices you make and more runway for them to grow into a larger payoff.  

Many young people also fail to realize the true purpose of investing. They may think of stockbrokers or day traders looking to turn a quick profit on a stock sale rather than focusing on the longer timeline toward retirement. You may just be starting your career, but retirement will be here sooner than you think, especially if you make the right choices now.

All of this is to say that young professionals should assess their budgets and develop goals for long-term financial planning and investment. With a realistic and updated budget in hand, you can make decisions about your expenses, like which ones are truly essential and which ones can be cut back, to then see how much is left over for saving and investing.

Take a bucket approach.
When making your plan, think about your needs but also the benefits you have the opportunity to pursue. Here are some good examples.

  • Employer Match
    Does your employer offer matching contributions for your 401(k) or other retirement account? That’s free money no one should turn down. Make whatever contributions you need to max out their match.
  • Tax Advantages
    Many retirement and savings accounts offer different kinds of tax advantages. Some may make your contributions tax-deductible, like a simple IRA, while others offer tax deferrals, like Roth IRAs. Study the differences and find the best way to diversify your savings and investment accounts to maximize your advantages.
  • HSAs
    Health savings accounts are an attractive option for young people with few health issues. You may not need as many doctor visits, and your medical expenses are still low. This gives you the luxury of taking a high-deductible, low-cost health insurance plan that can be paired with an HSA for unexpected and large expenses.
  • Paying Debt
    If you have student loans or credit card debt, set aside a recurring amount each month for payments. Some may prefer to pay them off quickly, but depending on the terms and interest rate, it could also be wise to reduce your monthly payment amounts in favor of saving or investing that money instead.
  • Emergency Account
    This is one of the most important buckets to fill. Starting in 2024, more employers may offer this option as a benefit outlined in the SECURE Act 2.0 legislation. Get started now, because rainy days will come, especially as the years go by. Decide now how much you can afford to sock away each month for a rainy day and stick to it. And be sure to put it in an account you can easily access when you need it.

Prioritize your future goals.
Retirement isn’t the only thing worth saving for. You may have other goals in mind, like luxury travel, taking care of family or buying a home.

The latter is the most likely scenario, and you should decide early if home ownership is a good fit for you. If you’re a doctor or other professional who expects to move to a new city soon, it may make the most sense to rent until you land in a more permanent place. Typically, if you expect to spend the next three to five years in one spot, it may make sense to buy. Before you do, scope out the local real estate scene to check inventory and value now as well as what it’s forecast to be over the next few years. A home can be an investment, but if the local real estate market turns sour a few years later, it could become a liability.

You can also talk with a mortgage professional about what kind of home loan suits you best. Some offer special rates or even discounted down payments for certain types of young professionals.

Pay yourself first and start good money habits.
When you build a budget, you need to prioritize your buckets. First, budget for making minimum payments on student loans and other debt. Then it’s time to pay yourself. A good example of priority order is:

  • Minimum debt payments
  • Maxing out retirement match
  • Emergency funds
  • Saving three to six months of living expenses
  • Investments

After that, you can decide how much to budget for housing and other essential bills, look at making more debt payments and, finally, fun money.

More money comes with more responsibility and a lot of decisions on what to do with it. Even though budgeting and financial planning can make it easier, you’ll still have a lot of interplay between the buckets.

It’s never too early to engage a financial planner who can help you take the long view and see how each move affects another. Here's a checklist to take with you when you meet. Taking that action now could help you find confidence and build a generous retirement package when you get to the other end of your professional journey.


Henry Caldwell is a financial consultant with Raymond James Financial Services and Pinnacle Asset Management. His office is located at 202 Campbell Ave. SE in in Roanoke, VA. He can be reached by phone at 540-769-8544 or by email at

Securities offered through Raymond James Financial Services, Inc, member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risk, including the possible loss of principal.  Pinnacle Asset Management, Pinnacle Bank, and Pinnacle Financial Partners are independent of RJFS and are not registered broker dealers. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.

Any opinions are those of Henry Caldwell and not necessarily those of Raymond James.  This information is intended to be educational and is not tailored to the investment needs of any specific investor.  The information contained herein does not purport to be a complete description of the securities, markets, or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation.  Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not indicative of future results.

Links are being provided for information purposes only.  Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed website or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use information regarding any website users and/or members.

Quick Links

Article Search

Read the latest eNewsletter