Year-End Financial Planning

The road to financial independence isn’t always a smooth one. There are plenty of things that can pop up and derail us from our goals. Sometimes it’s an unexpected turn of fortune, like a sudden loss of a job or a medical crisis. More often than not, though, the things that derail us from our financial goals are our own financial bad habits.

There are a lot of financial bad behaviors that plague every-day Americans: impulsive purchases and overspending, not living within your means, lack of a financial plan for emergencies and the future. One of the most challenging aspects of financial bad habits is how unassuming they seem at first glance. Most of these bad habits appear to have a minor impact in the moment. Yet, living years with these bad habits left unchecked can do more damage to your long-term financial health than some of these situational detours, like the loss of a job or a medical crisis.

Awareness of these bad habits is the key to kicking them. Once you identify what they are, you can put steps in place to work against them. Not sure where your money is going? Make a budget and make sure that where your money goes reflects your values. Are you an over spender? Perhaps avoid those spending triggers like a mall or online vendors and give yourself a cash allowance rather than utilizing credit cards. Do you need to put more money away for an emergency fund or investments? Have money automatically transferred every month to ensure that you’re paying yourself first.

If you’re not sure what your financial bad habits are or how to fix them, working with a financial advisor might be your best course of action. Having a third-party look over your financial house and habits can help identify unhelpful behavior or areas of improvement. Our Decision Coach program was especially designed for those folks who may need some additional accountability and coaching. In fact, if one of your financial bad habits is lending money you can’t afford, a financial advisor can be a great scapegoat as to why you have to start saying No. We don’t mind being the “bad guy” to your loved one if that helps you stay on your path to financial independence.

The path to financial independence can have some pot holes, the most significant being our own self-sabotaging behaviors. However, the proper awareness can bring change. Changing any type of behaviors take time and support, and we’re happy to help those who are committed to helping themselves.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

In almost every journal entry I write, I include, “I am grateful for…” and list three to four items from my day that reminded me of how grateful I am. Just last night my wife of 10 years, laughed out at loud as she noticed, I had written, “Popcorn” as I enjoyed a bag in the last minutes of the evening after putting our young boys to bed. It is the little things that make life grand, right?

In light of the deep gratitude I experience on a daily basis, here are 8 financial planning action items I’m grateful for. I know my clients feel the same way because of the significant impact these ideas have over time:

1. Automatic monthly savings plans into investment accounts.

I am grateful because these plans create structure and commitment.

2. The proper 401(k) allocation.

I am grateful to help align risk, time frames, performance, and cost with the fund options available.

3. Roth IRAs and Roth 401(k)s.

I am grateful because we are in a historically low tax environment and Uncle Sam has already been paid.

4. Intentional and proactive communication with an Advisor.

I am grateful to help eliminate inefficiencies and “leaking out the back door” with surplus cash flow.

5. The right insurance solution.

I am grateful for financial reassurance.

6. An understanding of where my current savings rate ends up at the end of the road.

I am grateful when I can provide clarity to planning so that my clients know what they are actually saving for.

7. An outside, objective, fiduciary perspective.

I am grateful when a client calls asking about a refinance option, a car purchase, or stock options. Even though I don’t directly manage these decisions, they do have an impact on your financial plan.

8. Non-retirement investment accounts earmarked for future priorities.

I am grateful when clients can save and grow their money, yet still have access to their funds for that next down payment, big trip, or redoing the kitchen.

Yes, I am grateful for buttery popcorn, but more importantly, I am grateful for the motivation and trust of my clients and business partners.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine what is appropriate for you, consult a qualified professional.