Some of our clients come to us early in their careers.
David met with us a few years after graduating from college and finding an entry-level position at a large company. Recently promoted, he was enjoying the higher income but concerned he wasn’t taking full advantage of his employee benefits or saving enough for his future. David was considering whether or not to apply to graduate school to further his career prospects, but harbored concerns over adding to his existing student loans and taking time out of the workforce.
Our initial discussions with David focused on better understanding his short- and long-term goals. With an increase in salary and bonus, it was important to him to get off to a good start financially and create good habits. He had been contributing the default amount into his 401(k) but had chosen investment options randomly. In discussing graduate school options, it became clear that David had not yet defined the most useful route to furthering his career. In fact, he decided to put off pursuing a higher degree and seek more input from experienced colleagues about advancement possibilities within the company. After reviewing his income and expenses, as well as sorting through his employee benefits and tax return, we provided David with strategies to help him build a strong financial foundation for both the near and long term.
Benefits of Working With Clarity
The advice we provided David allowed him to:
- Optimize his student loan payments to accelerate payment of higher-rate debt first
- Create a plan to increase his emergency savings as well as savings for short-term goals (within 3-5 years, such as graduate school)
- Increase contributions to his 401(k) plan to take full advantage of his employer match
- Diversify the investments in his 401(k) plan for long-term growth, while also keeping management expenses low
- Open up a separate Roth IRA account for tax-free growth and back-up emergency fund
- Enroll in his employer’s medical Flexible Spending Account for additional tax savings, and explore his tuition reimbursement options