Financial Planning for Millennials

Financial Planning for Millennials: Maximize Your Money

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As millennials, navigating the complex world of personal finance can feel overwhelming. 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. However, with strategic financial planning, millennials can take control of their finances and build a secure future.

In this comprehensive guide, we’ll explore essential financial planning tips tailored specifically to millennials.

 

Who is a millennial?

A millennial, also known as Generation Y, is someone born between the early 1980s and the mid-1990s to early 2000s, though the exact range can vary depending on the definition used. In 2024, millennials generally fall within the age range of their late 20s to late 30s. They are often called digital natives because they have grown up with notable technological advancements like the internet and mobile technology. 

Millennials are often associated with values such as prioritizing work-life balance, being environmentally conscious, and favoring experiences over material possessions.  Additionally, millennials have lived through significant historical events including 9/11, the 2008 financial crisis, the emergence of NFTs and Bitcoin, and the global pandemic. These events have had a profound impact on their perspectives and behaviors.

 

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. 

Financial planning for millennials goes beyond traditional approaches. It encompasses creating a roadmap for achieving short-term goals like paying off debt and saving for major life milestones such as homeownership and retirement. By leveraging technology and innovative financial tools, millennials can streamline their financial planning process and maximize their resources.

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 financial advisors serve millennials? 

Traditionally, many financial advisors primarily catered to affluent retirees; however, a growing number now specialize in various life stages. Financial advisors serving millennials offer personalized financial planning and investment guidance designed specifically for individuals born between 1981 and 1996. 

Millennial-specialized financial advisors can develop customized financial plans that address common financial challenges that millennials face. With a focus on millennials, our financial advisors understand the unique challenges you face, such as paying off student loans and choosing the best college savings account for your children. 

 

Who are the best 5 financial advisors for millennials in 2024?

Here are the results of the top 5 financial advisors for millennials. The financial advisors are listed in order of lowest to highest monthly minimums. We have included a blurb from their website. This is not an exhaustive list of financial advisors for millennials and it reflects our personal opinion per our criteria above.

Financial planners come from diverse backgrounds and offer varied perspectives and services tailored to different clients. Ultimately, you are the best judge of who suits you best as a financial advisor. Hopefully, our list can assist you in narrowing down your options and guiding you toward the right direction. 

  1. District Capital Management – Washington, D.C.
    “We provide financial planning for professionals and entrepreneurs in their 30s and 40s. Our strong investment team has worked with over 300 professionals in their 30s and 40s in the tech, consulting, government, non-profit, and small business owner world. We have encountered almost every personal finance issue that millennials face.

    As a millennial-specific company, we understand the unique challenges that millennials face. We also understand that millennials are busy and have a lot of priorities so we hold virtual financial planning meetings to maximize time.”

  2. Brooklyn FI – New York, NY
    “BKFi can help you get to where you want to be. We help our clients get their financial lives together, make smart moves with the money they have, and make smart plans for what’s to come.We advise on a vast array of strategies in our comprehensive financial planning process.”

  3. 2050 Wealth Partners
    “2050 Wealth Partners provide ongoing wealth management and comprehensive financial planning services. They help their clients build, grow, and protect wealth with upfront planning, ongoing support, and accountability. They work with their clients 100% virtually.”

  4. Financial Staples – Atlanta, GA
    “Our clients are tech professionals in their 30s and 40s who want to make the most of their high incomes and maximize their wealth building potential. Many receive equity compensation in addition to a cash salary and bonus. As their lives become more complex, they value the expertise of an advisor so they can spend their time and energy on things that matter most to them.”

  5. Gen Y Planning – Austin, TX
    “Gen Y Planning brings financial planning to millennials. We work with a variety of clients in their 20s, 30s, and 40s who are in the middle of making huge life decisions: navigating a new job, buying a home, merging finances, starting a family, relocating, and pursuing advanced degrees. The Gen Y Planning team believes that the earlier you work with a CFP®, the faster you can build a secure financial foundation for the future.”

Top financial planners for millennials 2024

Year 1 MinimumYear 1 MaximumFee Structure
District Capital Management$4,500$15,000Flat Fee
AUM
Brooklyn FI$4,500$24,000Flat Fee
AUM
2050 Wealth Partners$5,500$8,500Flat Fee
AUM
Financial Staples$6,000?Flat Fee
Hourly
AUM
Gen Y Planning$6,800$16,000Flat Fee
Hourly
AUM

What makes District Capital Management different from other millennial financial advisors?

Like the other best financial advisors for millennials that made it into our list, District Capital is also a fiduciary and we have CFP®, AFC®, and ChFC® professionals on our team. Our primary focus is serving professionals and entrepreneurs in their 30s and 40s. 

The three traits that make District Capital unique are:

1) Robust investment team. Our team boasts two CFA charterholders with extensive experience managing multi-billion dollar institutional funds, ensuring our clients receive exceptional investment guidance.

2) Modern planning approach. We deliver our comprehensive 30+ detailed recommendations via a modern platform that is easy to use and available all the time.

sample financial plan
This screenshot showcases a sample plan crafted for our clients using Monday.com.

3) Extensive experience serving millennials: We’ve worked with over 300 professionals in their 30s & 40s in the tech, government, non-profit, and small business owner world. We’ve encountered almost every personal finance issue that they have faced.

How do millennials find financial advisors?

  1. Search on Google: If you are searching for a financial planner, then you may want to consider going to Google first. Begin your search by entering terms like “financial advisors for Millennials” or “financial planning for Millennials” into the search bar. This targeted approach will yield a selection of financial advisors who specialize in serving the unique financial goals and challenges of the millennial demographic.

  2. Look for a fee-only certified financial planner (CFP®).
    To ensure the highest level of expertise and ethical standards in your financial planning journey, it’s advisable to partner with a Certified Financial Planner® (CFP®) who operates under a fiduciary duty and follows a fee-only structure. A CFP® designation signifies extensive experience and successful completion of a rigorous certification exam, showcasing their proficiency in financial planning.

    Opting for a fee-only financial advisor guarantees transparent financial guidance and management, devoid of any conflicts of interest or hidden fees. With a commitment solely to your financial well-being, they provide advice, investment management, and other services for a clear, upfront fee. This approach ensures that your interests remain paramount throughout the advisory process, offering you peace of mind in your financial decisions.

     

  3. 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 ask.

     

What are some key questions to ask a millennial financial advisor?

1. Are you a fiduciary? First, you will want to confirm that they are a fiduciary financial planner. This means that he or she will act in your best interest.

2. How do you get paid? You will want to work with a fee-only millennial financial planner who has transparent pricing. Fee-only financial planners only get paid through the fee. There are no commissions, kickbacks, or referrals.

3. What are your credentials?  Look for financial planners with either a CFP®, AFC®, or ChFC® designation. They have undergone rigorous training. 

4. What is your client demographic? It’s important that your financial planner has experience working with people similar to you. If you are a millennial then you will want to work with a financial planner who caters to millennials. 

We also put together a list of the top 10 questions to ask a prospective financial advisor to help you navigate the interview process. This will help you decide which financial planner is right for you.

5 basic millennial financial planning rules from a financial advisor

In a fast-paced world, financial planning for millennials is crucial. Here are five fundamental rules to help you secure your financial future, as said by an experienced financial advisor:

  1. Start a structured savings plan
    Begin by analyzing your income, monthly expenses, and discretionary spending. Calculate the ideal balance between expenditure and savings to meet future financial objectives. Automate savings by setting up automatic transfers from your paycheck to designated investment or savings accounts, ensuring consistency and discipline.

  2. Invest according to your goals and risk appetite
    Every person will invest differently because we all have different goals and risk appetites. Risk appetite is how much risk you are willing to take when you invest. 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 soon, 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 fade.

  3. Diversify your investments
    Spread your investments across various asset classes to mitigate risk. Diversification minimizes exposure to market fluctuations by avoiding over-reliance on any single investment. While certain assets like mutual funds offer higher returns with increased risk, others like fixed deposits provide stability. Balance your portfolio to optimize returns while safeguarding against potential losses.

  4. Have an emergency fund
    An emergency fund, or a rainy day fund, is money 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, planning for retirement is important 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. If your employer offers a contribution match then invest enough to take advantage of this. 

    A study found that only 58% of Millennials are saving for retirement. Another 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 to feel more confident and prepared for the future. The sooner you start saving for retirement, the sooner you will also benefit from compound interest. 
Millennial Financial Advisor'

What are millennial financial challenges?

Millennials face several challenges that are unique to their generation. Some of these challenges include


1. High cost of living: In recent decades, the cost of living has surged significantly, outpacing wage growth. This makes it increasingly difficult for millennials to save for major financial milestones, such as buying a home or paying off debt. The soaring costs of housing, healthcare, education, and everyday expenses strain millennials’ budgets and make it hard to achieve financial stability.

2. Mounting student loan debt: Millennials bear the brunt of staggering student loan debt, with an average balance of $33,173 per borrower. The escalating cost of higher education, coupled with limited financial aid and rising tuition fees, leaves many millennials grappling with substantial debt burdens. Repaying student loans becomes a top financial priority, often delaying other life goals such as homeownership, saving for retirement, or starting a family.

3. Lack of financial literacy: Despite living in an age of information abundance, many millennials lack fundamental financial literacy skills. This deficit in financial knowledge impairs their ability to make informed financial decisions and plan effectively for the future. Studies reveal that millennials exhibit the lowest level of financial literacy compared to other age groups, with only 24% demonstrating basic financial understanding. Without adequate financial literacy, millennials may struggle to navigate complex financial landscapes, leading to potential pitfalls and missed opportunities for financial growth and security.

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 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.  

A 2021 survey found that 65% of millennial investors will likely 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. 

Financial advice for millennials in 2024

By mastering the fundamentals of financial planning and implementing strategies tailored to their needs, millennials can take control of their financial future and achieve their goals. Whether it’s paying off student loans, buying a home, or saving for retirement, strategic planning and disciplined execution are key to building a solid financial foundation for the years ahead.

Work with a millennial financial near you

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. Here at District Capital Management, we specialize in financial planning for professionals in their 30s and 40s. Book a complimentary discovery call to see how we can help you achieve your financial goals!

Best Financial Planner Washington DC

Alvin Carlos, CFP®, CFA is an investment advisor and fee-only financial planner, in Washington, D.C that works with clients across the country. He has a Master’s degree in International Relations from SAIS-Johns Hopkins. Alvin is a partner of District Capital, a financial planning firm designed to help professionals in their 30s and 40s achieve their financial goals through smart investing, reducing taxes, retirement planning, and maximizing their money. Schedule a free discovery call to learn how we can help elevate your finances.

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District Capital is an independent, fee-only financial planning firm. We help professionals and entrepreneurs in their 30s and 40s elevate their finances and maximize their money. We are based in Washington, D.C and we work with people virtually nationwide.

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