Hi there and welcome to my first blog post!
If you haven’t checked the About page, I’m a young adult just starting out in the financial industry. I knew I wanted to write about my experience, but I wasn’t sure how. Should I send a Weekly Market Commentary like my mentor? Or maybe a blast email? Or maybe a bunch of smaller emails targeted to a specific group of clients? What about a blog?
If you couldn’t tell, I went with a blog.
I graduated nine months ago and started working two weeks after graduation. Not a lot of downtime, but I needed to start earning money! Our firm takes on a lot of retirees and people looking to retire. Everywhere I look in the office, retirement is there!
Working here, I know the importance of saving for retirement. As a young professional, I know how hard that can be.
Before working in finance, I wouldn’t have been able to tell you what an IRA meant or why a 401(k) was beneficial, especially if you worked for a company that matched your contribution. I didn’t know that you could do monthly deposits from your bank account into an IRA or what an annuity was.
There is so much that happens post-graduation that they just don’t teach you in school. Coming into the real world was real overwhelming. It seemed like every article I read was telling me that I should start saving for retirement.
The first day, my mentor told me an important strategy to conquer it all- “third, third, third.” I had no idea what he was talking about. I looked at him very confused. He said “that’s it, third, third, third.”
1/3 for taxes, 1/3 for expenses, and 1/3 for investing/saving.
- 1/3 Taxes: If taxes come out of your paycheck, you can focus more on the other two thirds. If you’re a 1099 worker, you should put away about a third of each paycheck you receive for that impending tax bill.
- 1/3 Expenses: This could be tough if you’re just starting out and probably have a smaller salary, but if you keep this in mind, you will most likely end up spending less than you otherwise would. If you live below your means, you will save more money, and be better off in the long run!
- 1/3 Investing/Saving: To be honest, I interpret investing a few different ways. This can be investing in your retirement plan, the market, or in an emergency savings fund. I also took this to mean investing in my business wardrobe, investing in technology that will help me succeed, and investing in books and other study materials.
Disclaimer with investing: when I say this, I don’t mean spend 1/3 of your salary each month on clothes. What I mean is don’t wear that dress around the office that you wore to a fraternity party. When you invest in your professional image, you will be perceived as a professional.
If you try to set aside a third for investing/saving as a young professional, you will be ahead of the game! Saving a little now can add up in the long run. Would you rather set aside a little each month now or wait 15-20 years and have to set aside a larger portion of your paycheck to save for retirement? The decision is yours to make.
Now for the frosting.
When I’m not working, I love to bake all types of goodies. Baking is such a great outlet for me. I can tune out the world and get that necessary down time that allows me to function at work.
I made cake last night with the help of my sous chef, Peanut. I decided this year for my birthday I wanted to try something new- a white velvet cake with strawberry raspberry buttercream frosting. I will post photos of the finished product with next week’s blog post. For now, you can look at my whopping five pound cat entranced by the cake in the oven.
My goal for this blog is to help other young professionals navigate their finances and share some delicious treats I whip up along the way. Thanks for reading- stay tuned!