Your college years can be an exciting time, as you look toward an amazing career and future. Important to that scenario is feeling financially confident so that you can keep moving forward toward your goals and the life you envision for yourself.
Whether you are still a student or just recently graduated from college, it’s a great time for you to get perspective on your finances and start making plans for how you will manage your money as you transition from college. Many college students and graduates find that consulting a financial advisor helps. A financial advisor has the ability to look at your unique financial situation, understand your long and short-term goals, and help you develop plans and strategies to achieve them.
Is working with a financial advisor right for you? Let’s explore some of the pros and cons.
The Pros of Working with a Financial Advisor
In the months after you graduate from college, you may face immediate financial issues — e.g., how you will pay off your student loans and how you will manage greater income when you get a job in your field. Financial planning after college is vital to your longer-term future as well, as you begin making financial decisions with the potential to impact your life decades down the road:
- How much should I save for retirement? Is my employer’s 401(k) plan enough, or should I also open an individual retirement account (IRA)?
- How much should I be saving? Investing?
- Am I better off starting my own business or working for someone else?
- Should I buy a house? How much should I spend?
Why take the chance of “winging it” on these important decisions when you have the opportunity to tap into the expertise of someone trained in financial planning for college students and graduates? A financial advisor can help you make well-informed decisions, develop smart strategies and build healthy habits to serve you throughout the rest of your life. They can teach you tried-and-true approaches to budgeting, saving, investing and planning.
The Cons of Working with a Financial Advisor
Now let’s look at some of the reasons people choose not to consult a financial advisor. First, it costs money. Second, it takes time. And third, it requires commitment.
When you consult a professional about anything, it costs money. The question is whether the fees you pay your financial advisor are offset by the financial benefits you get in return. Many college students find financial advice to be well worth the outlay of cash because they reap the rewards of their financial planning for the rest of their lives. They appreciate knowing, too, that their financial advisor is there for them when they find themselves with extra cash on hand (e.g., receiving a big tax return) or, conversely, when they are hit with a financial challenge (e.g., losing their job).
It takes time to work with a financial advisor, too, not only for meetings or calls but also for doing the homework. You need to devote regular time to stay on top of your budget, spending habits, investing, etc. Arguably, it may take less time to manage your finances with an advisor than without, though, since they help you put systems into place that make managing your finances easier over time.
Commitment comes in when you build a plan with your advisor and then need to stick to it. Say you agreed on an aggressive savings schedule when you landed a high-paying job. Temptations will come that try to lure you to spend instead of save, but if you want to reach the long-term goals you set, you need to stay on course.
The Choice Is Yours
A financial advisor can help you evaluate your financial situation, develop a strategy for paying off your student debt, create a plan for achieving your short- and long-term financial goals, and build healthy money habits to carry with you throughout your life. Is it worth the investment of money, time and commitment? It’s a very personal decision — one only you can make for yourself and your future.