6 Reasons to Have a Financial Advisor In Your 20s and 30s

Whether you’re thinking about investing or planning for a big purchase, making financial decisions in your 20s and 30s might feel like walking a tightrope. You might find it challenging to create a budget, cope with debt, or take on any other money management task.

However, working with a financial advisor will take the load off your shoulders. 

A financial advisor is a professional who provides clients with specialized knowledge on how to manage their money. 

So, what do they do?

• First, they’ll analyse your current financial situation and future goals.
• Next, they’ll develop a formidable plan to help you effectively utilise your finances and achieve your goals.
• They will review and adjust your plan when necessary.

Financial advisors are invaluable professionals. Here are six more reasons to have a financial advisor, especially in your 20s and 30s.

Read Also: Should I Get a Financial Advisor In My 20s and 30s?

1. Tailored Guidance Based On Your Financial Goals

Tailored financial advice is like a bespoke suit in men’s fashion. Let’s illustrate this further.

You can buy a suit off the rack in a clothes store or get a tailor-made one that suits your specifications and body shape. The one you buy off the rack comes in standardised sizes.

If you’re fortunate, it might fit you. But this is not always the case. You can easily buy the wrong size. 

On the other hand, a bespoke suit is carefully measured to ensure it fits you. The tailor will consider your budget and ensure it meets all your specifications. Although this comes at a cost, it will stand the test of time.

So it is with financial advisors.

They’ll take into account your unique circumstances and tailor their advice to help you achieve your set goals. They can help you with budgeting, investing, saving for retirement, and much more.

Although there is the cost of hiring them, you can rest assured you’re making sound financial decisions that will put you on the path to achieving your long-term financial goals.

Read Also: Why You Might Need a Financial Advisor

2. Get a Headstart On Retirement

If you're thinking about retirement, you're probably wondering how to finance it despite your other expenses. However, financial advisors make retirement planning gentle.

Here’s how:

• They can help you estimate how much money you will need to retire based on your current lifestyle and income. 
• They can choose the best retirement savings account for your needs and provide advice on investing and growing your nest egg.
• They can guide you in creating a withdrawal plan for your retirement savings, so you know how much you can safely spend each year without running out of money. 
• They can help you review your retirement plan periodically enabling you to stay on track.

Read Also: 7 Reasons Why Retirement Planning Is Important

3. Nurture Healthy Financial Habits

Many people have unhealthy financial habits. Maybe you're not good at saving money, or you overspend when you go out with friends.

It is not always easy to overcome your own flaws.

Fortunately, a financial advisor can assist you in overcoming these obstacles and developing better habits.

They can help you nurture better financial habits by providing guidance and support on how to save money, invest wisely, and manage your finances. In addition, they can also help you create a budget as well as offer advice on how to reduce your expenses. 

Read Also: 5 Financial Habits Of Kenyans Who Own A Home Before Age 35

4. Help Eliminate Debt

Debt can feel overwhelming especially if you’ve fallen into a debt cycle. However, a financial advisor can help you get back on your feet. Here’s how:

They’ll help you create a budget

Languishing in debt is similar to bleeding from an open wound. A financial advisor can stop the bleeding by mapping out your cash flow and identifying areas you need to cut back on. By cutting back on some expenses, you can get extra money to pay off your debt.

Read Also: Coping With Debt: How To Deal With Debt of Any Size

They’ll analyse and restructure your debts

Some debts such as payday loans attract higher interest than others. A financial advisor can analyse your debt and advise on a debt repayment strategy. Paying off debt with high-interest rates is always ideal.

For example, if you have Ksh20,000 to pay your debts every month, the bulk of it should go to paying the debt with high interest.

Even so, continue making the minimum payment on the low-interest ones so that you don’t default and end up on the CRB.

Read Also: How to Check Your CRB Report and Understand it.

5. To Balance Your Portfolio

One role of a financial advisor is to recommend investments based on your risk tolerance. They analyze your financial situation and find the right investment portfolio for you. 

What’s more? The best way to reduce risk is diversification. A financial advisor can educate you about your available choices and the best for your portfolio. 

Lastly, as time goes by, your preferences will change. Your investment portfolio might not reflect what you need.

When this happens, a financial advisor can help you rebalance your portfolio per your financial goals. 

As such, you can avoid making emotional decisions like selling your assets prematurely.

Read Also: Ways to Invest If You Have a Low-Risk Tolerance.

6. For Professional Objective Assessment

Doctors are health experts. Likewise, certified financial advisors are experts in handling personal finances.

Their specialised knowledge allows you to employ financial strategies you’d never have imagined. They have handled different clients before and have a firm grip on all the tricks of the trade.

As such, they can assess your situation and recommend effective strategies to help you achieve your financial objectives.

That said, always work with certified financial advisors. By working with a certified financial planner, you can rest assured your money is safe.

Read Also: 9 Financial Topics You Need An Understanding Of

Wrapping Up

Your 20s and 30s are the best time to start working with a financial advisor. You may have a lot of challenges that they can help you overcome. 

Besides creating a budget, a financial advisor can help you plan for your retirement or manage your debt. Above all, they’ll help you create a roadmap to ensure you achieve your financial goals.