William Bevins is a Certified Financial Planner in the metro Nashville, TN area offering retirement planning and investment advice. He serves clients as a fiduciary financial advisor putting their interests first when offering investment or financial planning.

Millennials are quite possibly the most underserved group within the US when it comes to financial planning and investing for future events, such as college or retirement savings.

As a millennial financial advisor, I believe helping younger professionals is just as important as those who have finished their careers and are currently retired. Here are 5 important rules to help millennials on their path to financial freedom.

1. Begin a savings plan today

A great place to begin thinking about saving money starts with your current salary. Build a budget within your current earnings power. Review where your money is going each month. Decide what is really important and what can be eliminated. Every dollar saved each month can be used for more important things later in life. A great way to save is to have a set amount earmarked to go into a savings account, independent of your checking or your debit card. This makes the funds harder to access, especially for compulsive buys. I use the Starbucks example with younger clients. A few years ago I noticed some of my younger clients visited Starbucks every day and sometimes twice per day. I asked them to audit their bank statement to keep track of the amount they were spending on coffee. While doing this it made them more conscious of where their money was going. Before long they were tracking how much they spend on expensive meals, designer clothing, etc.

2. Identify your goals and risk profile then invest accordingly

Because no two people are alike, investing will look different for everyone. What's important here is, and an experienced wealth manager can help, each person's risk tolerance should be identified early on. A single mom of 2 young children might view risk much differently than a single business owner that receives a large compensation or bonus each year.

Someone willing to accept more risk must also remember that markets swing both ways over time. Generally, higher-risk investments can yield higher returns, while lower-risk investments yield more stable returns over time.

A great planner will marry risk tolerances with financial goals  to produce a portfolio that reaches the client’s objectives over time.

3. Diversify

A well designed portfolio is diversified between stocks and bonds. Sometimes utilizing low cost exchange traded funds. Owning a combination of these investments helps reduce risk and volatility. A fee-only financial planner has access to these tools.

4. Establish a fund for emergencies

Sometimes referred to as a rainy day fund, having cash set aside for emergencies is a great financial planning tool. This fund covers the “what if’s”. For example, what if you lose your job? What if you become ill and cannot work for a period of time. The list of “what ifs” can be lengthy but having 3 to 6 months of income on hand will help in a pinch.

5. Start planning for retirement

For some, the thought of retirement seems a lifetime away. The truth is for many millennials retirement is not as far away as you may think. For those who take action now, retirement becomes much more achievable.

Utilizing an employer's retirement plan will help accumulate retirement dollars in a tax-efficient way. Many employers will even offer matching dollars to add to your retirement accounts to help the cause. Tax-efficient retirement plans are also available for those who are self-employed. Ask your financial planner for details.

The most important takeaway from beginning retirement planning at an early age is to learn the power of compound interest. The earlier you can begin saving for retirement the more time your investments are allowed to work and compound. The benefits of this strategy is very powerful.

About William Bevins: William Bevins is a CERTIFIED FINANCIAL PLANNER. His training includes the areas of tax, insurance, and estate planning. His planning is designed to help professionals achieve their financial goals through retirement planning, smart investing, reducing taxes, and maximizing their money.

For more information, please reach out via email or visit my website for help.