Category Archives: Goals

Five Ways to Save More

Posted in Financial Planning, Goals, Spending Plans, Tips on by .

Many of our clients want to save more.   These 5 tips will inspire you save more for retirement and other goals while minimizing your anxiety!

  1. Understand that there are only two ways to increase savings Earn more or Spend less.   Enough said…no fairy dust.
  2. Understand the concept of Retirement  It’s important to know why you are saving.  Think about it…if you start working and saving at 30 and you plan to retire at 65 and you live till 95 you have 35 years to save enough money to live on for 30 years.  Social Security is designed to provide about a third of your need in retirement, the rest comes from pensions and/or savings.
  3. Have an Emergency Fund Having 3-6 months of expenses in a savings account helps you save for the long-term and protects you and your family in case of emergencies.  Without an emergency fund, small problems like a lost job, a car breaking down, a tree falling on your house, or an illness, can become major life setbacks.
  4. Create a Real Spending Plan Monitor your actual spending and saving for 3 months and create a monthly and annual spending plan using these actual numbers. You may not like these numbers but this is your reality.  By studying where you spend you can make changes that have real impact instead of wondering where your money is going.
  5. Accrue funds for large non-monthly expenses Put money aside each month for your non-monthly large expenses.  Vacations, holiday spending, home improvements and summer camp are large expenses that seem like unwelcome shocks to many people.  Instead of being surprised and eating ramen noodles the months after your vacation, calculate your annual spending on vacations and transfer 1/12 of that amount out of your pay every month to a separate savings account.

We hope these tips help.  Good Luck!

Carolyn and Beth

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Systems Not Goals #3–Setting up a Personal Safety Net

Posted in Financial Planning, Goals, Tips on by .

We started of the year posing the idea that instead of setting big goals and worrying about your ability to make them, you can position yourself for success by setting up smart systems.

In previous posts, we talked about reviewing your Net Worth on an annual basis, and about Tracking Your Spending to increase your money awareness. The last system we recommend is the creation of a Personal Safety Net. Unemployment, illness, and family issues can take a toll on your financial situation.  Many people never fully recover financially from these life events.  By reviewing and adding to your safety net once a year you can increase your resilience, protect your savings and shield your family from the financial effects of life’s downturns.

The following are some basic components of a personal safety net that you can begin assembling today:

  • Set aside 3-6 months of expenses as a cash Emergency Fund;
  • Purchase or sign up for the benefit of Long-Term Disability Insurance to provide you with an continuous income should you become unable to do your job prior to retirement;
  • Purchase adequate Term Life Insurance if you have people dependent on your income;
  • Put in place a Medical Directive, to ensure that your wishes are carried out in the event of a medical emergency;
  • A Durable Power of Attorney, will enable your trusted designee to carry out your financial and administrative responsibilities should you become incapacitated;
  • Last Will and Testament – Ensures that your estate passes to your heirs outside of probate and according to your wishes;
  • Review/Update beneficiaries for IRAs, 401(k)s and insurance policies.  These accounts are distributed directly according to the designated beneficiary, no matter what your will may say, so it is important to keep them updated.

This may seem like a daunting project, but even tackling one of these items per month will go a long way to protecting you and your family and will give you all kinds of feelings of accomplishment and peace of mind!

Happy Systems!

 

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