Luke Milholland CFP®,ChFC®,CLU®

Estate Planning

Life goes by so fast.  

It seems like just yesterday I was graduating college, and now I am securely in my thirties.

What they say really is true, "The days are long, but the years are short."

We all have our own unique financial journeys. We have different incomes, and different financial setbacks along the way. Something I have noticed when meeting with new clients is that many of them are making good money, but somehow they wake up well into their thirties feeling like they haven’t made great strides financially.

Many of them are super smart and are excelling in their careers. However, they feel like they don’t know where to begin when it comes to their personal finances and achieving their goals.

This article will take you through eight financial decisions every professional needs to make before turning forty.

1. Set SMART Goals For Your Money

But first, create a vision. It could go without saying, but this is too important to skip.

Just like anything in life, your finances need a clear purpose, otherwise, you will “default” through life.The result will be waking up one day realizing that you are nearing the end of a working career wondering what you have to show for forty years of income earning.

Creating a clear vision and setting SMART Goals will give purpose and context to the remaining seven financial decisions we will discuss.

SMART Goals are:

Specific, Measurable, Attainable, Realistic, and Time-bound.

Start with the end in mind.

What do you want to be remembered for? What goals do you have for yourself and your loved ones? How can money serve as a catalyst in accomplishing those things?

2. To Budget or Not To Budget

Yes, I am talking about a budget here.  I know for some that might as well be a four letter word which is exactly why it tops the list. An utter disdain for something doesn’t make it any less important.

If you create a clear vision for your future, and have prioritized what’s important to your family, then creating a budget will become a lot easier.

There are many online tools you can use, or you can easily create your own budget using a spreadsheet. Heck, if you want to use a napkin and a crayon, that works too. Just do it!

The one thing I would encourage you to do is to structure your spending plan to be inline with your priorities and to think through what things are truly necessary and which things are simply a means of improving your quality of life.

Download The Prioritized Spending Plan Template

3. Should I Buy Life & Disability Insurance

If you are a young professional, your ability to produce an income is the fuel that makes everything else go. Therefore, it may be a very prudent idea to protect It.


Ideally, the goal is to get to a point where you are not dependent on a paycheck to survive, but until then, consider insuring enough capital to sustain yourself and your family. This is not a "fun" topic to think about, but should your ability to continue earning go away, you will be so glad you did.

If you are single, the primary threat is becoming sick or injured to the point where you cannot work. However, if you are married or have dependents then you should also consider the financial implications should you die prematurely.

I can’t tell you the number of intelligent young professionals I meet that have not given this much more than a fleeting thought. While it may not be the most fun conversation, it is very important. Life and disability insurance doesn’t have to be hard or expensive.

Until you have financial independence and as long as you have people depending on your income, proper life insurance and disability insurance planning should be considered.

4. Get Serious About Debt

If you haven’t already, it’s time to get serious about getting out of debt. Especially the unsecured, high interest kind. Some collateralized low interest debt on a business or piece of real estate might not keep you up at night, but credit card debt needs to go ASAP. It will be hard to ever get ahead financially, no matter how much you earn, if you are paying 20% interest on debts.

Other debts to be weary of at this point in life are ones that are tied to depreciated assets, like pretty much anything with a motor. If you are not socking away money in savings and investments but have loans on cars, boats, etc. that is nearly a sure fire way to wake up at 60 wondering why you have nothing to show for your all your hard work.

5. Start Funding Retirement

Funding a 401(k) or IRA is a great place to start. If you are not maxing those out every year, that could be great goal.

Getting to a point where you are saving at least 15% of your income should put you on a good baseline track for a traditional retirement. From there you can decide whether you will fund a Roth or Traditional.

If your household income is over $193,000 you may be limited to your use of IRAs and/or need to be saving more than the limits on 401(k)s & IRAs. While this is a good problem to have, it is nonetheless a challenge that requires a little more creativity.

6. Plan For Your Kids Education

If you have kids you may want to plan for their education if you can.

However, I think it is more important to get on track for retirement first. I say this because loans, scholarships, and working are all viable options for college that don’t exist for retirement. There are no loans or scholarships available for your elder year, and if you are working your way through then it really isn’t retirement is it?


7. Get Your Estate In Order

Estate Planning is not just for people who have amassed great wealth. Especially if you have minor children it is imperative that you get your affairs in order. Knowing who is going to look after the kids in your absence or who should make decisions on your behalf should be you be incapacitated are important decisions regardless of your net worth.

Wills, Revocable Living Trusts, Advanced Directives, Powers of Attorney, and making sure your beneficiary designations are right are worth considering. Talk with an Estate Planning attorney to determine which strategies are right for you and your unique set of circumstances.

8. Develop a Personal Wealth Statement

A Wealth Statement is writing down your views on money and the roll it will play in your life.  Will you pursue riches at the expense of your family? Will you build wealth to fund world peace?  Will define how much is “enough” and focus more on time with your kids?

If you don’t define the role money plays in your life, money will define you.

I believe every person has a God given purpose, and that how they relate to money will either serve as a catalyst in fulfilling that purpose or as a culprit in sabotaging it. Take some time to define wealth for yourself and outline what a healthy relationship with money should look like for you.

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