Financial planning is essential, no matter how you earn your income – but it's particularly important when you're starting out as a young professional. A comprehensive, long-term financial plan can make the difference between struggling to manage your money and building wealth successfully.

You should be thinking about your financial strategy even while you're still studying, or in work experience to qualify for accreditation in your chosen profession. But how do you ensure your plan caters to all your current and future needs and stays relevant? This is where professional financial advice is immensely valuable.

Why financial planning matters for young professionals

You can't control the future, but you can control how you prepare to handle the twists and turns of fate. You can build a secure legacy to pass on to your loved ones or causes you support. Sound financial planning helps you build wealth to benefit future generations.

A professional career comes with many perks, but it also has a cost in time and hard work, especially when you’re young and starting your working life. Dealing with all these challenges can take up so much of your workday that you don't find time to plan future financial goals. You might not revisit these goals as often as you should – or avoid planning altogether because the thought of it overwhelms you.

Break these habits. You need to plan and manage your finances throughout your life to achieve your goals and not have them disrupted by every unexpected expense.

Watch our webinar about what to consider during different life stages.

What a holistic financial plan should include

Your financial plan should cover every aspect of your life, today and in future. In the early stages of your career, your financial plan may focus on your immediate needs, but you need a holistic plan that considers your goals at every life stage. This will include savings and investments, cover against various risks, asset financing, managing debt cost-effectively and to your advantage, and retirement and estate planning.

A comprehensive plan gives you a roadmap to the future you want and lets you take control of your financial destiny. You can make more informed decisions when you’re knowledgeable and confident about money matters.

The role of a financial adviser in your career journey

When it comes to building wealth, every financial decision you make affects your ability to protect what's important to you, and to achieve your life goals and professional aspirations. A financial adviser can offer you expert, objective personal guidance and support for your plan to build wealth. They'll help you make more considered decisions and avoid various financial pitfalls throughout your career.

• They can help you navigate life choices in much the same way as a life coach.
• They'll help you pick the right financial products for your needs from all the choices on offer.
• They'll show you how to protect what’s important to you.
• They'll force you to be realistic about your goals and stay on course.
• They can provide the guidance you need to achieve your life goals.

The Nedbank Edu-series is also an excellent source for guidance on financial and investment planning.

The true cost of not getting financial advice: Common financial mistakes

As a fellow professional, you'll understand that advisers charge a fee for the services they provide. If you choose not to consult a financial adviser, you should weigh up the costs of getting it wrong.

Here are a few examples of common financial mistakes: 

• Dying without a valid will, causing long-term disruption and uncertainty for your family.
• Not making provision in your estate for the costs that will apply upon your death – like capital gains tax, estate duty, executor's fees, and funeral expenses. Your executor may otherwise have to sell assets like your home or vehicle to pay these costs.
• Picking an investment product with high taxes and costs, which work against your investment goals.
• Withdrawing your retirement savings when you change jobs. This could push back your retirement date or leave you with less than you need to retire comfortably, making you financially dependent on others.
• Selecting a business ownership structure that can't continue after your death. This can leave your loved ones and employees in a difficult situation.
• Refusing to create a financial plan. You’ll have no control over your financial future, and no idea how financially secure you’ll end up when you retire.

Objective, personal advice helps you make the most of your money

Always get professional advice before you make financial decisions, whether big or small. Objective, personal guidance gives you peace of mind that your financial choices are all working towards the same goal, lets you make better money decisions, and help you avoid financial missteps.  

Need objective financial planning guidance?

Here's what to do:

• Contact your financial planner. If you don't have one, ask your Nedbank private banker to introduce you.
• If you're not a Nedbank client and want to find out more about how we can help you, we would love to hear from you. Please complete our online contact form, and one of our consultants will call you back.

We offer full-service banking to young professionals, with benefits like round-the-clock service, travel perks, Greenbacks rewards, and access to professional wealth advisers to help you build and update your long-term financial plan.