When it comes to money, it’s almost impossible to get to adulthood without some form of financial baggage.
I know I have some: during my childhood, money was very tight, and we lived in financial chaos all the time. It wasn’t until I was a young adult, working my first job, that I was introduced to saving for the future by my boss at the time. Until then, the word “insecure” was what best described how I felt about money.
Financial embarrassment knows no age or income level; I’ve met many people throughout the years who are established in their careers, making good money…and are still uncomfortable asking questions about their finances.
During my time as a financial planner, I’ve worked with widows who have been suddenly thrust into managing their household finances and divorcees who are starting over again and wondering what comes next. One of my favorite clients – she is an executive - has thanked me for holding her hand through major life changes, protecting her confidence and her dignity.
This is no small thing.
Taking the first step
Sometimes I wonder if the words “financial plan” are what make people hesitate before contacting someone to help them. When I Google synonyms for “financial plan” this is what comes up on WordHippo.com:
- Prediction of revenue and expenditure
- Fiscal estimate
- Estimated expenses
Good grief. I wouldn’t want to call anyone either. That sounds miserable.
What the RIGHT kind of financial planning is is exactly what many of my clients experience: it’s a way to give you confidence and a sense of pride in where you are now and where you’re going. A financial plan itself is something you can refer to and remind yourself of your priorities, your values, and the reason you’re working so hard each day.
As life changes (and it will change!), your financial planner is there to help you alter that plan if necessary. Taking care of an elderly relative? Call your advisor. Had a job change? Call your advisor. Filing for a divorce? Call your advisor.
The plan we’ve put in place can and will evolve. There’s no shame in that. That’s life!
What are some financial planning tasks you can do on your own?
Emergency Fund
Having a personal emergency fund can provide financial security and prevent you from having to rely on high-interest credit cards or expensive payday loans during times of need. This fund should be able to sustain you for six months’ worth of living expenses.
Take Advantage of Your Benefits
Your benefits package typically adds up to 30% to your paycheck. As an example, if your salary is $40K/year – your benefits may be worth an additional $12,000, bringing the value of your paycheck to $52K/year.
Also, find out if you have access to a Health Savings Account (HSA). This is a pre-tax savings plan to reimburse yourself tax free for qualified medical expenses including dental and orthodontia.
Many people don’t understand their benefits package and therefore lose out on some of the perks. Financial advisors can help you read through the fine print and take advantage of your benefits.
Find a Hobby!
I bet this one took you by surprise! Yes – I want you to find something you enjoy doing. When I ask people what they plan to do when they retire, they often aren’t sure. Creating a life outside of work is important when you transition from working full time to having a lot of free time at your disposal.
It can also help when it comes to your retirement planning. By knowing what you enjoy doing and how much it might cost to do it, we can build that into your future goals.
One last thing
Again, I know when money topics come up most of us have some complicated feelings around them. But remember that the ultimate goal is for you to feel financially confident and for you to have access to the resources you need when you need them. Just as you would talk to a therapist, mechanic, doctor…anyone who can help you solve a problem…meeting with a financial advisor is a great way to get your questions answered.
CRN – 5613191-040623