Having not yet been kicked out of any Young Professionals’ clubs, there’s a couple more decades of experience under my belt than the next generation of young professionals.  As a personal investor and financial planner with over 30 years of experience, here’s some ageless wisdom for young professionals in your 20’s and 30’s.

#1 Invest in your career – It’s been said that it takes seven years to become an expert.  You’ll be in one or more professions for decades.   Keep yourself marketable by continually learning your craft and your industry.  Read. Take online classes. These days many professions require continuing education credits.  Use yours to advance your expertise.

#2 Sharpen your spending plan flexibility –Your financial picture may change rapidly over the next decade as you marry, have kids, change/advance jobs or start a business.  Your budget and income could change dramatically year to year.  Develop the skill of responding by staying frugal in your required spending (a skill you probably practiced while in school) and lavish in your savings.  That will give you the most flexibility as your income goes up or down or has gaps for extended periods.

#3 Avoid debt traps – Every life change is a lure into racking up credit card debt.  It’s the easy fix when you buy a home, have a baby, move and need furniture right now! Be careful when taking on debts.  It can take years to pay them off.

#4 Balance debts with other goals – Don’t laser focus debt payoff to the exclusion of other goals. While it’s generally a good idea to pay off debts as rapidly as possible, avoid using every ‘extra’ dollar from every source while short-changing other goals.  Windfall money such as a tax refund, bonus, lottery winning or a raise should be balanced among your goals of emergency readiness, retirement progress and education planning.  In my 30 plus years of financial experience ‘laser focused’ debt payoff (to the exclusion of other goals) leads to rebound credit card debt.  Better to balance debt pay down with asset growth.  See Hints 5 and 6.

#5 Develop strong financial habits – Challenge yourself to the 50/50 rule.  Every raise or new increase in income, increase saving by 50% and put the other 50% into living expenses, if your budget is still very tight.  As soon as you are ready, adopt the 1/3, 1/3, 1/3 rule – allocate every increase or windfall into 1/3 into spending now, 1/3 into short term goals such as debt pay-down or short term project (new house, vacation, remodel, etc), & 1/3 to long term wealth accumulation such as retirement savings.

#6 Redefine emergency spending – New tires are not an emergency – your car will need them every two or three years.  Your house will need a new major appliance, a refrigerator, washer or dryer every few years.  Most older cars need a repair almost every year. Your vacation is not a surprise – you planned it!  Put these items into your spending plan and put money into an account every month until they happen.

#7 Assure your goals happen no matter what – Once you have loved ones who depend on you such as spouse who shares your goals or children who need an education, make sure those things can happen even if something happens to you.  Review your life, disability, home owner’s, auto and health insurance to make sure your lifetime of financial effort does not get ruined by something out of your control.

This list can help you establish a solid financial foundation aimed at helping you achieve lifelong financial independence.  You’ll be on your way towards building wealth and pursuing financial security. Take it from an older young professional who has blazed the trail before you.

Merra Lee Moffitt, a Certified Financial Planner™ professional is a Senior Partner at Good Life Financial Group, Wyomissing. She spends all day every day helping educate young professionals, entrepreneurs and families toward building financial stability and lifelong financial freedom.   Call, click or contact at 610-628-2055, www.Welcome2TheGoodLife.com/MerraLee and merralee.moffitt@lpl.com.