As a young professional, it can be hard to determine, what’s next?
After securing a job and having a steady income, setting up an emergency fund, and laying down your financial foundation, you may be left wondering what your next money moves should be. While many people talk about short-term and long-term financial goals, medium-term goals are glaringly missing from the conversation.
If you already have your financial foundation set and are curious what to do next, here are 3 tips to help you figure out what’s next for your finances.
As a young professional, it’s likely you are set up with health insurance through your employer. But are you protecting yourself with other forms of insurance?
In order to protect yourself and your finances, it’s important that you invest in renter’s insurance or homeowner’s insurance.
According to a 2014 Insurance Information Institute poll, 95% of homeowners had homeowner’s insurance, whereas only 37% of renters had renter’s insurance.
If you are just getting started and renting, it’s key that you insure yourself and your belongings. Renter’s insurance can cover your possessions, even if they are lost or damaged outside of the home, and can provide personal liability should someone get hurt in your apartment.
Aside from renter’s insurance, you may want to look into life insurance if you have a family. Start thinking about how you can protect everything you’ve worked so hard for thus far.
Disability insurance is another to consider so you can protect a valuable asset: your ability to work and earn money.
Save Up for Big Goals
After saving for your emergency fund, paying off debt, and contributing towards your retirement, it can be hard to figure out what’s next.
The first step in getting started, is to dream big. Ask yourself, honestly, what you want out of life.
What are you looking to accomplish in the next 5-10 years? Are you planning to save up for a downpayment on a house, or prepare for your first child? Are you planning a round the world adventure?
Whatever your mid-term goals may be, you need to start saving for them now.
Start by estimating how much you think each goal will cost. To help you get started, open up targeted savings accounts and set a regular savings schedule to keep you on track. Automate y our contributions so there are no excuses for not saving.
Saving up large sums of money can seem overwhelming. After all, if you are saving up for a down payment, or your child’s education, you can be saving thousands of dollars over many years.
The key is to remember that medium-term goals require patience and persistence. Keep the big picture in mind and take baby steps to reach your goals.
If the small steps aren’t working, evaluate your plan and change it up. The point is to be consistent and remember what you are saving for — even if it’s years away.
Invest (in Yourself)
Many people have access to a 401(k) provided by their employer. As a young professional, this may be your only investment vehicle.
While saving up for retirement is a crucial stepping stone for your future, it’s key to diversify your portfolio. Consider investing in a Roth IRA as well, which provides after-tax benefits.
Aside from investing in the stock market and having a balanced, diverse portfolio, think about investing in yourself. How can you sharpen your skills? Does that mean going to graduate school, or perhaps partaking in other training opportunities?
Medium-term goals are often a large part of life — after setting up a foundation and preparing long-term for your future. To be successful and figure out what’s next for your finances, use these steps to get started.
If you’re confused about getting started with your medium-term goals and getting it right, consult a financial planner that can help guide you along the way.