This October Resolve to Finally Take Control of Your Financial Future
October 1 marked the beginning of the fourth quarter of 2018. Isn’t it amazing how quickly time flies?
October has been designated “Financial Planning Month.” And for very good reason. For many people, it marks yet another quarter that has passed without much thought about the status of your financial future. Throughout the year, maybe there were changes to your financial situation that you just didn’t plan for; a raise? a new position? even getting let go? For many, it also marks one quarter closer to retirement. These are just a few factors that you may need to take into account when preparing a financial plan—and important reasons to reevaluate that plan each year.
My intention is not to scare you or make you wary of your financial plan. It’s quite the opposite. If you are like most Americans, you know the value and importance of having a long-term financial plan…but maybe you haven’t planned accordingly, or even at all.
You’re not alone. The Economic Policy Institute calculates that nearly half of U.S. families have no retirement savings. And among those who have saved for retirement, just 38% of investors have a written financial plan, according to a Gallup survey. And you know what Benjamin Franklin said: “If you fail to plan, you are planning to fail.”
But it’s October. The beginning of a new quarter. And it’s Financial Planning Month. There is no need to wait until the new year to make a resolution that could change your fortunes and your life.
Need a place to start? Here are some important factors to consider:
- Time is money. In the case of retirement savings, the more time your money has to accumulate interest, the greater your sum will be. So, the sooner you start the better off you’ll be. The same rings true as your retirement date draws closer and you switch from accumulating assets to spending your life-savings. Leading up to retirement, it’s important to take some time to reevaluate your investments, consider any changes in tax status, and think about how your Social Security and healthcare benefits could impact your finances.
- Know your risk tolerance. Far too many people associate financial planning with the daily rise and fall of the stock market. They see the Dow Jones Industrial Average skyrocketing one day, and then seemingly cratering the next, and they are beset with worry, which all too often leads to inaction. But an experienced financial advisor will work with you to assess your risk tolerance—based around your age, your plans and ideas for the future, your health, and your individual financial situation, among other considerations. Financial advisors have many investment options in their toolbox that will fit your situation—and with a sensitivity to your risk tolerance.
- Put it in writing. We’ve all heard the admonition, “The best laid plans of mice and men often go awry.” But have you noticed that most of the plans that go off the rails are those that aren’t put down on a piece of paper, and reevaluated regularly, throughout the entire process? If you are really, truly serious about taking control of your financial future, you should put your plan in writing.
Attaining and maintaining good, long-term financial health isn’t something that usually happens on its own. But it starts with an honest assessment of the financial resources you’ll need to pursue your goals. A well-thought-out plan can help you define, articulate and, most importantly, help you to delineate the steps you need to take toward achieving your long-term financial goals.
This month make setting your long-term financial goals your priority, your “fourth quarter resolution”. You will be taking an important step in the direction of ensuring a positive financial future. If you have any questions about planning for your financial future, send me an email at [email protected]