We are less than two weeks away from the end of 2020 (which we can all agree, probably can’t come soon enough!). As the year wraps up, now is a good time to review your budgeting and expenses over the past 12 months and see where, and how, you spent your funds. If you had a budget you were working in, did you meet your benchmarks? Did you spend more than intended in certain areas or less? Where there legitimate reasons for overspending? If you don’t have a budget, did you find yourself spending more than you thought on particular items/services? Do you want to get your expenses in order or under control? Use the answers to these questions to help guide you as you prepare your finances for 2021. If you find your expenses or spending habits make you a bit uncomfortable, you may want to consider getting more serious about budgeting. If you need help with getting your finances in order, I encourage you to meet with a certified financial planner or wealth manager who can help you both organize your money as well as place it in a spot where it can grow or help your future.
A majority of the time, personal finance conversations/blog posts/podcasts center around saving. When spending money gets talked about, usually it has to do with paying down debts or making necessary purchase, such as homes or cars. However, it’s important to remember that finance is more than just saving for retirement or to own a home. It’s more than just worrying about debts. Spending is an important part of personal finance as well. Now, I’m not encouraging you to go out and spend like it’s going out of style. What I am encouraging you to do is to be smart with your money and to spend on things that are important to you. Is there a hobby that keeps you active and happy? Don’t be afraid to spend a bit on it. Of course–I’ll reiterate–don’t spend obscene amounts on it, but a few dollars here and there won’t hurt. Being happy and active can go a long way in life and is just as important to your well being as how much money you save. Spending can also be helpful in other ways, such as helping you to build credit, if you are a young saver. Having strong credit can help you down the road when you apply for car loans or mortgages by helping you to secure a favorable rate. The key though is that you don’t get too caught up in saving as you march towards retirement. Yes, you should of course work to meet your retirement saving goals and should save enough live comfortably after you stop working. However, you shouldn’t be afraid to spend a little on yourself. Don’t be afraid to plan a vacation from time to time or buy yourself that new piece to tech to make your life a little more efficient. So what will you spend money on?
Saving for or financially planning for the future can be a daunting task. Whether you’re in your twenties and saving for a house or in your forties and kicking your retirement savings into high gear, saving enough to meet your goals can seem impossible and overwhelming. Furthermore, if you have debt to manage and expenses to pay in order to get your finances into proper shape. Many people struggle with this and it’s the reason why I–and the industry I work in–exist. There’s no shame in asking for help when it comes to money. Finances can be tough to manage and they can easily get out of control of you don’t have a plan or understand what your priorities need to be. In such instances, a good financial planner can set you on a path to success by providing you with the knowledge and tools you need to get things in order. Many Americans think they can go it alone when managing their finances or are too embarrassed if they have debt or little savings. For some it works, for others…not so much! If you are one of those embarrassed about your money situation, don’t be. There’s probably more people out there struggling with money than you realize. Even if you have a good grasp of your finances and feel you’re doing well managing your debt and saving for your future, there’s still no reason not to talk with a financial expert. They may be able to suggest investments and ideas for further expanding your wealth or ways to save you more money. So, when was the last time you got help with your finances?
As my last blog post mentioned, it’s a tough time to be making retirement decisions. That’s regardless of whether it’s changing your retirement saving goals, deciding to actually retire, or making financial decisions in retirement. Make no mistake, the current economic situation will impact retirement decisions for at least the next year and probably even longer. It’s already forcing many older and retired Americans to make decisions about whether they should consider taking money out of their retirement accounts earlier than anticipated as well as whether they should file for Social Security sooner than they want to. Keep in mind that during the last recession–back in 2008/2009–Americans over the age of 62 saw a noticeable uptick in those filing for Social Security. Furthermore, when it comes to Social Security, you’re monthly payments increase the longer you wait to file, which is why many retirees try to not receive Social Security benefits until they are closer to 70. In regards to other retirement finance sources, many retirees face a tough decision about which accounts to tap first if they have more than one. And if they’re forced into retirement a few years sooner than anticipated, the nest egg might not even be where it is supposed to be for a post-work life. These can be stressful decisions and need to be carefully thought out. If you need help with making retirement-related decisions during this day and age, you should speak with a certified financial planner or wealth manager.
We are heading into uncertain times. The world is dealing with a dangerous pandemic that is wreaking having on the global economy. In a matter of a few short weeks the Coronavirus has drastically changed the way we socially interact with one another, the way we work, and the way we educate our children. Whether all this is good or bad remains to be seen. However, I can guarantee you that things will not be the same once we get through all this. And yes, we will get through this. It’s almost impossible to tell at this moment as to what the future will look like. It may be rough for some, but not so bad for others. It will most likely fundamentally change the way we live our lives. Some industries may fade away much sooner than predicted and others may blossom. Many Americans will probably have to work longer or heavily curtail their retirement plans and goals just to survive. Many young Americans will struggle to find their financial professional and financial footing. We could also be setting ourselves up–at least here in America–for a massive change in how our government operates and may speed up the timetable for implementation of Medicare for all and bring about some big discussions surrounding whether the government should bailout corporations in future economic downturns. I’m not trying to scare your regarding the future, but I am trying to prepare you for what the future may hold. I’m am encouraging you also to keep moving forward with your life and planning for your own future. However, you may want to remain flexible in your goals and plans and be willing to adjust to whatever the future holds. So, are you ready for the future?
Yes, it’s another blog post about investing. What can I say, it’s a very hot topic right now. Given how many Americans have retirement savings and nest eggs tied up in the stock market, it’s also a very relevant topic. When it comes to investing, risk is a big part of things. Your understanding of it and how much you are willing to take on are foundational when it comes to making investing decisions. Given the recent market volatility, it’s fair to assume that many Americans’ tolerance for risk are being tested at the moment. Most likely, yours probably is too, particularly if you have a portfolio that is heavy into stocks. Thus, now is a good time to re-assess your appetite for risk and to make changes to your portfolio if you find that your appetite isn’t what it once was. This will most likely be greatly influenced by your financial situation as well as how close you are to retirement. Most likely, you will find your appetite for risk decreased the closer you are to retirement, but there is also a possibility that you may find your appetite for risk has increased. If that’s the case, feel free to make decisions that may be a bit more aggressive. Now, if you find that your appetite has changed and you want to talk with a professional about what to do next or what the right moves might be, I encourage you to speak with a certified wealth manager or financial planner.
Whether you want to admit it or not, the Baby Boomer generation is a large demographic. They have a large impact on society as the oldest members of the generation as well into retirement and the youngest are just starting to consider stepping away from the work force. The sheer numbers of the Baby Boomer generation will continue to have an impact on the economy and healthcare for decades to come. Keep in mind that they are living longer than past generations thanks to advances in healthcare and medicine. Why does all this matter? Well, it matters because any large generation moving into retirement age is going to require resources and will have economic impacts. For example, an a large aging population will most likely put a big strain on Medicare or Medicaid. This could have huge impacts on government budgets and how other governmental programs get funded–particularly programs that may impact younger generations. As for the economy, with more Baby Boomers passing away as time goes on, markets that needed them to survive may find the going tough as their customers are no longer there or no longer need their services and/or products. There is also the fact that aging parents and relatives can put a serious financial and emotional strain on their families. This is important to think about for both younger generations as well as those moving into retirement. If you are younger, you will need to think about whether you have the finances to care to for an aging parent. You will also want to have discussions with that aging parent or relative about the type of care they want and the finances involved. If you are part of the Baby Boomer generation and moving into retirement, then you may want to start talking with your children or grandchildren (or nieces or nephews) about the type of care you want and what your finances will allow. This doesn’t have to fall on one generation, but should be a multi-generational effort to make sure that all are on the same page and understand what needs to be done. If you need help with the financial discussions, you should speak with a certified financial planner or wealth manager. They can help you to get an idea of where things stand and what products/services you may want to consider in the future. There has also been a lot of research done on the aging Boomer generation, so you may also want to read up on that and the potential impacts that may lie ahead as Baby Boomers age.
It’s the beginning of a new year, which means it’s time for you to start thinking about your financial goals for the next 365 days. Do you want to have a certain amount saved up by the end of 2020? Do you want to pay down a particular debt? Do you plan on putting yourself on a budget and making a big purchase? Now is a good time to shape your goals for the year and take steps to begin doing whatever it is you have in mind financially. That may mean talking to a financial advisor or wealth manager. It could mean finding a new app to track your expenses for your budget. Or maybe it means making larger payments towards your debts. Whatever it is, now is the time to start doing it. It won’t always be easy and it will take perseverance and patience, but you will meet your goals if you work at it. So, go on, start making the most of 2020 when it comes to your retirement or finances.
I recently saw a thread on a social media site–Reddit, to be specific–in which someone was asking for advice on how to handle a situation involving the poster’s elderly mother. The mother had impulsively gone into a car dealership and was sold a used car along with a hefty warranty and many add-ons, which almost doubled the price. The mother had no income and somehow was approved for finance. The poster, once he found out, wanted to undo the deal as it was expensive and appeared that his mother had been taken advantage of at the car dealership. A number of those offering advice suggested that the poster and his siblings should consider pursuing power of attorney (if possible in their state) so that their mother could not make such impulsive decisions that could wreak havoc on her–and her children’s–finances (they financially support their mother). This made me think about the importance of protecting finances in retirement, both your own and those of your parents. It’s not unheard of to read stories like the one above and such big purchases are not always easily undone, leaving your parent on the hook for something they have no means to afford. Furthermore, the complex legalese in financing documents associated with buying something like a car can be tricky for most people, let alone an elderly person who may be easily confused. A lot of these issues can be resolved by being proactive and talking about what you want done with your finances with your family. This means having difficult discussions with your parents about who they want overseeing their finances as well as discussions with your own children or heirs about who should oversee your own money. In regards to your parents, it can be tough to take away their financial freedom and they may not be receptive to the idea, but you need to remind them that it’s for their own good. You may want to look up resources and suggestions for having such a conversation by either talking with a lawyer who specializes in such things (yes, elder law is a thing) or by searching the Internet. In regards to your own finances, you need to talk with your children about what you want done and when. These can be some of the most difficult discussions you can have about growing old as it’s talking about your financial freedom, but that can be essential to avoiding situations like the one at the beginning of this post.
We’re a little less than 10 days away from Christmas, so chances are, you’ve probably done all your holiday shopping at this point. However, if you’re looking for a few more gift ideas for your children or grandchildren, then maybe you might want to consider something with a focus on finances and money. For example, a book on personal finance can be a great gift that can help people more than they may even realize. There are many such books out there covering various aspects of personal finance, so you may want to stick with bestsellers on this. A personal finance book can make a great stocking stuffer too. If you know the person you’re buying for probably won’t read a book, then maybe consider a financial contribution to a 529 plan. While this may not bring immediate joy to a child’s face on Christmas Day, it may really help them in the future. The cost of a secondary education these days is immense and only looks to get more expensive as time goes on. Helping to get a 529 plan started for a young child or grandchild could go a long way once they graduate college and start out in the real world. It may not cover all the education expenses, but even just having a few thousand dollars less of debt can be a huge boost to a young adult. If you are retired, you can also consider making a qualified charitable distribution (QCD) to a charity in honor of a friend or family member. Not only will such a donation have a positive tax consequence, but it can also be a touching gift, especially if that person being honored has worked closely with that charity or it is a cause that they truly care about. If you have questions about 529 plan contributions or making a QCD, you should speak with a certified financial planner or wealth manager.