The Early to Mid-Career Professional

The Setting

Jennifer graduated college with a marketing and communications degree. Since graduating, she has worked for four different companies ranging from start-ups to Fortune 500 companies.

Jennifer has invested a lot of time, money, and energy into herself in order to take her career to the next level. However, lately she’s felt anxiety and uncertainty around her personal finances. She simply wants a plan that she can follow that will result in less anxiety, more confidence, and more peace of mind.

She is knowledgeable, wise, and cherishes relationships above just about everything.

The Conflict

Although Jennifer is knowledgeable in many areas, she has never taken the time (nor does she want to) to become an expert in all things personal finance. She realizes her time is better spent on things that matter most to her and that she truly enjoys.

Jennifer had more questions than answers:

• How should my 401(k) be invested and am I saving enough for retirement?

• What should I do with all my old 401(k) accounts?

• What changes need to be made to pay off my student loans ASAP?

• How much house should I buy and how big does my down payment need to be in order to buy a house in the next 5 years?

• How can I better manage my monthly cash flow (income and expenses)?

• I like giving, what is the best way to go about giving to the causes I care about?

She knows she needs a plan and someone to guide her.

The Approach

First, I listened. I talked with Jennifer and asked the questions that many planners fail to consider. I asked her about her history with money, her best and worst financial decisions, her dreams and aspirations, and ultimately what was most important to her.

Many of the questions and concerns Jennifer had are common with my clients.

Once I truly understood her goals and motivations, we were able to create a unique plan together, with the proper action steps, to strengthened the fibers between her finances and what was most important to her.

The Resolution

After many meaningful conversations and analyzing the information, I was able to help Jennifer:

• Increase her 401(k) saving from 10% to 15% of her income AND help her participate in a Mega Back Door Roth 401(k). I also helped choose the best investments, low-cost and globally diversified index funds, within her 401(k) plan that aligned with her risk tolerance & retirement time horizon.

• Consolidate all of her old 401(k)s into her current 401(k) to allow us to monitor and manage them more easily.

• Construct an accelerated debt elimination schedule based on her goal to pay off her student loans before buying a home. I also helped her refinance her student loans for a better interest rate and thus a quicker payoff.

• Identify how much house she should buy based on her income and the appropriate down payment for a house.

• Create and implement a reverse budget (pay herself first). Together we automated all saving and goal funding to be taken care of first from her paycheck and then she was able to live off the rest confidently and guilt-free.

• Create a giving plan, nested within her new reverse budgeting system, so she could give to the causes she cared most about. She is now able to give from her income and highly appreciate stock via a donor advised fund.

• Increase her emergency fund to 6 months worth of living expenses to properly protect her from life’s uncertain events.

We meet on a regular cadence and track her plan and portfolio to ensure she’s maintaining a proper trajectory towards achieving her financial goals. Jennifer is excited for her personal finance journey and to finally have an advisor that listens and works WITH her instead of over her.

Now that she has a plan that she’s confident in, Jennifer has peace of mind over her finances and is able to fully focus on her relationships, hobbies, career, and the most important things in her life. The way it should be.

Note: The above case study is hypothetical and does not involve an actual Prospurpose Wealth client. No portion of the content should be construed by a client or prospective client as a guarantee that he/she will experience the same or certain level of results or satisfaction if Prospurpose Wealth is engaged to provide financial planning or investment advisory services.