Starting a Career with $120,000 in Debt

by Leonard Toenjes

Q: I recently graduated from college with bachelor and master degrees in construction management. I got a job and am savoring the thought of my career. I am also loaded with debt from student loans. My indebtedness well exceeds $120,000. Plus, I am soon expecting more personal debt because I recently became engaged. How can I find a reliable certified financial planner specializing in working with construction professionals who can offer me solid advice? Do you have other tips on personal finance for the construction professional?

A: With recent fluctuations in the financial and loan markets, it is critical to deal with a solid financial planner who fully understands your current situation, your needs, your future goals and is not afraid to be brutally honest with you concerning your options.
Over-promising results or painting too rosy of a picture has gotten more than one individual into financial problems related to such items as the recently publicized “sub-prime” loan market. It is truly a time for extra caution and care in selecting help in this area.

Since you have now landed a job, begin by checking with the top level staff in the accounting department at your new employer.

The chief financial officer may be able to provide some insight into any company resources or referrals available. Also ask some of the upper executives within the company about their own personal financial advisors.

Financial assistance may be a perk for some upper executives, and even though not offered to you at this time, upper management members may provide a name or contact for local financial advisors who specifically understand the situation of the construction professional.

Looking at Variables

As far as tips on personal finance for construction, the market variable and project variable are important to understand. As a construction manager, compensation packages are often based on a base salary with bonuses each year based on project profitability.

Before contacting any financial advisor, it is best to do your homework and fully understand the short term and long term outlook for your income with base salary and bonus. While it would be great to have the maximum bonus amount each year and on each completed construction project, it is unrealistic.

It would be good planning time spent to hold some candid conversations with other project managers within the firm to get some sense of the bonus history and outlook for project managers. Many construction firms are placing a higher emphasis on project bonuses as an incentive for project managers, so be sure to take extra care to fully understand the total picture related to this aspect of your income.

Armed with these basics, you are then ready to look at other variables related to your financial future such as your fiancée’s career and financial plans, mortgages or living expenses, your possible future family plans, structuring your debt retirement on a pace that you are both comfortable with, and investments, savings, and retirement benefits that are structured to maximize return and minimize taxes. In the same style as budgeting with a fundamental income and expense statement, project conservatively on the income side and liberally on expense side and it should work out profitably in the long run.