Although many people can benefit from hiring a financial advisor, millennials face challenges unique to their generation that can make it essential. As of 2016, millennials have surpassed baby boomers as the largest generation in America's workforce (1). This means that more adults are beginning to think about and make serious financial decisions that will affect the rest of their lives.
A financial advisor can help bridge the gap between expectation and reality. Still, with millions of millennials struggling with student debt, home ownership, and the difficulties that come with starting a family, it can be difficult to know when it's time to ask for help. That's why we asked financial advisor Alan Franks for what he believes are the five key situations when it's time to start looking for advice.
1. When Student Debt Becomes Overwhelming
Americans today are saddled with a suffocating $1.5 trillion in student debt (2) - greater than any other period in history. Learning how to repay these loans can be critical for financial success, as this debt can follow you for several years in the future. When you're starting to feel overwhelmed by debt, it's a good idea to seek outside help.
Hiring a financial advisor can help you explore your options for repayment and make a comprehensive plan for the future. It can also help ease fears about your loans, and give you a realistic idea of debt in general.
2. When You're Merging Finances With A Spouse
When the honeymoon is over and life returns to normal, it's time for you and your spouse to get on the same page about your financial future. This can involve opening joint savings accounts, drawing up financial plans, figuring out retirement, or exploring life and disability income insurance.
Conversations about joining finances and debt can be difficult, and advisors can be mediators to help get all of your assets moving in unison to your unique goals.
3. When You Have An Emergency Fund Saved
Contrary to popular logic, I believe you can never have too much in cash. Cash is a necessary asset to own, as it helps cover any emergencies that may be on the horizon. However, you may not want too much of that asset earning a low to no interest rate.
The CFP Board recommends saving six months of expenses in an emergency fund for a single income household, and three months for dual income household. Once you reach these thresholds, you can consider looking for ways to put your money to work for you. A financial advisor can guide you in looking for ways to help invest and grow your money, and put you on track to helping you achieve your financial goals.
4. When You Are Seriously Considering Home Ownership
Most people still believe that you need to put 20% down when buying a home. Not only is that not true, but it may not be appropriate for your situation. You may be able to get into a nicer home much quicker than you think for a lot less of a cash outlay.
Frequently, mortgage payments are very similar to rent payments. However, instead of building your landlord's equity, you could be building your own. When you're seriously thinking of purchasing that first home, seeking a financial advisor can help make the process easier.
5. When You Are Starting A Family
Introducing someone to this world is not only a miracle, it's a huge responsibility. We need to make certain that we provide for our families not only while we are alive and healthy, but also if we were to become sick, injured, or die prematurely.
Getting the proper insurances in place while you are young and healthy can not only help save money in the long term, but can help secure the protection that your family needs and deserves. An advisor has the skills to help secure you and your family's future for the long-term, and can help protect you from life's curveballs.
If you think you're ready to start planning for a bright financial future, click here to speak to an advisor today.
Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC. 1050 Crown Pointe Pkwy, Suite 1800, Atlanta, GA 30338. 770-551-3400
The views and opinions expressed are those of Alan Franks. Alan Frank's views are not necessarily those of MML Investors Services, LLC or its subsidiaries.
(1) Fry, Richard. "Millennials Are Largest Generation in the U.S. Labor Force." Pew Research Center, Pew Research Center, 11 Apr. 2018, www.pewresearch.org/fact-tank/2018/04/11/millennials-largest-generation-us-labor-force/.
(2) Friedman, Zack. "Student Loan Debt Statistics In 2019: A $1.5 Trillion Crisis." Forbes, Forbes Magazine, 3 June 2019, www.forbes.com/sites/zackfriedman/2019/02/25/student-loan-debt-statistics-2019/#118fb57a133f.