Financial Planning for Millennials

5 min read
February 22, 2022

Financial Planning for Millennials


You may be early in your career so may not have amassed many assets yet. You may be juggling long-term goals for saving and retirement planning, with other priorities such as paying off student debt, saving for a house or paying off a mortgage, saving for your children’s education, traveling, or just growing your career. It can feel like a lot. If this sounds like you, then we are here to help you navigate these challenges.

Why is Financial Planning Important for Millennials? 

Financial planning is important for everybody. However, it is particularly important for millennials. Millennials live in a time of increasing cost of goods and services. It’s becoming harder for millennials to purchase their first home and inflation may be eating away at their hard-earned savings. Millennials have unique financial needs and money challenges that other generations have not faced.

"Millennials also make up the largest group in the workforce and many will be receivers of wealth in the coming years. Financial advisors can help guide you through complicated financial situations, reducing the amount of stress in your life so that you can get on with living the life that you want."

Do You Need to be a Wealthy Millennial to Work With a Financial Planner? 

There is a general misconception that you need to be already wealthy to work with a financial advisor. Financial planning can actually help you even when you are early in your career and are trying to save and manage your student loans. Your financial plan will then change and evolve as your life unfolds.  

2021 survey found that 65% of millennial investors are likely to begin working with a financial advisor over the next two years. If this is you, you may want to look for a financial advisor who works specifically with millennials and someone who can create a detailed roadmap for your financial future. 

How Do Millennials Find Financial Advisors?

  1. Look for a fee-only certified financial planner (CFP®).

You will most likely want to work with someone who has CFP® credentials, has fiduciary responsibility to their clientele, and is a fee-only financial planner. A CFP is a credential given to financial planners who have extensive experience working with financial planning and have passed a rigorous certification exam. A fee-only financial advisor offers financial advice, investment management, and other financial services for a set fee. They do not earn commissions from recommending certain products or services and there are no hidden fees. You can rest assured knowing that they have your best interest at heart. 

2. Here are 4 great websites to find a fee-only financial planner near you:

– National Association of Personal Financial Advisors (NAPFA): a non-profit association of fee-only financial planners.
– The XY Planning Network: the majority of the fee-only financial advisors listed here work with Generation X and Generation Y clients.
– Fee-Only Network: all of the financial advisors listed here are fee-only and are fiduciaries, meaning that they act in your best interest.|
– The Certified Financial Planner (CFP) Board: this is the entity that administers the CFP® designation which is perhaps the most well-known and trusted financial planner designation. However, not all CFP® professionals are fee-only financial advisors so make sure to ask. 

We also put together a list of the top 10 questions to ask a prospective financial advisor to help you navigate the interview process and to see if they are the right fit for you.

Millennial Financial Advisor'

5 Basic Financial Planning Rules for Millennials

  1. Start a structured savings plan: A good starting point is to look at your salary, monthly expenses and other things that you are spending your money on. From there you can work out how much you should be spending and saving to meet your future financial goals. A highly effective approach for saving is to determine a specific amount and then have that automatically taken from your pay check and deposited into an investment or savings account.

  2. Invest according to your goals and risk appetite: Every person will invest differently because we all have different goals and risk appetite. Risk appetite is how much risk you are willing to take when you make an investment. High-risk investments can yield higher returns but can be extremely volatile whereas low-risk investments yield lower but more stable returns.

    The riskiness of your investments should coincide with your financial goals. If you are looking at purchasing a house in the near future, then you probably want to make low risk investments since you won’t be able to ride the waves of the stock market. There are many different investment options such as mutual funds, stocks, direct equity, bonds, real estate, gold, and so on. Make sure you invest according to your financial goals, not the latest fad.

  3. Diversify your investments:  By diversifying your investments, you are reducing the amount of risk you will incur since you’re not putting all your eggs in one basket.

  4. Have an emergency fund: An emergency fund, or a rainy day fund, is money that you set aside for life’s unexpected events. If you lose your job or need to pay a large medical bill, then having an emergency fund will help you avoid getting into debt and it will make those stressful situations a lot less stressful.

  5. Plan for your retirement: Retirement planning can often feel like it’s a long time away. However, it’s important to plan for retirement because you won’t be working forever. You will probably want to invest in tax-advantaged ways that are specifically geared towards retirement such as an employer-matched 401(k) or an IRA. 

    A recent study by NAPFA found that 38% of millennials feel underprepared for the future. 34% also said that a lack of financial guidance is inhibiting their ability to prepare for retirement. A financial advisor can help you create a retirement investment strategy so that you feel more confident and prepared for the future. The sooner you start saving for retirement, the sooner you will also benefit from compound interest.  

Financial Advice for Millennials

Financial planning is a lot more than just money. We all have unique goals and money is a means to accomplish them. It’s a good idea to work with a financial advisor who is attuned to your specific needs and can help you navigate through life’s financial decisions. 

Alvin CarlosAbout the Author
Alvin Carlos is the founder of District Capital Management, an independent, fee-only financial planning firm. He helps professionals and entrepreneurs in their 30s and 40s elevate their finances and maximize their money.


Did you know XYPN advisors provide virtual services? They can work with clients in any state! View Alvin's Find an Advisor profile.