Take Control Of Your Financial Life: Get A Plan by Beth Jones, RLP
Confused . . . stressed . . . angry?
These are just a few of the emotions people are experiencing in light of the current economic recession. Whether you are starting to build a nest egg, or are close to retirement, the reality is that negative market performance and the current low interest rate environment have likely impacted your savings and investments. While that doesn’t make you feel good, you may want to step back and re-evaluate your situation. There’s nothing like a recession to motivate us to action.
Emotional responses may result in ill-advised action—or worse, inaction. It’s nearly impossible to make a sound decision when you are responding out of fear or anxiety. On the other hand, it’s easy to do nothing at all when we are overwhelmed. Both of these approaches aren’t beneficial over the long term.
Challenging financial times call for real action
Start by considering what’s really important to you and why. If money wasn’t an issue, how would you spend your time? Who is important to you? What makes your heart sing? Would you change anything in your life? When you start there, you are exploring life goals. What will it take and what are the obstacles to achieving them? Now, you can generate an inventory of specific goals you want to accomplish, and when. Once you map out your life goals, you can start taking charge of your finances to fulfill your goals.
Develop a financial plan
The goals that you have identified are too important to leave up to chance, emotional decisions, or inertia. It’s a bit difficult to create a complex financial plan on your own, but you can take action to get your expenses in line and perhaps, consider finding an independent professional to assist you.
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Dispelling myths about financial planning
There are numerous reasons why people choose not to take action during challenging financial situations, especially when it comes to developing a financial plan. Following are some of the most common myths. Don’t let them stop you from taking smart action.
Myth #1: Financial planning is for the wealthy.—Financial planning is for anyone who wants to take control of his or her financial life goals. Consider instead that a lot of wealthy individuals may have become wealthy because they did financially intelligent things like create plans and act on them. And what does wealthy mean, anyway? The fact is, even some millionaires don’t define themselves as wealthy and often think that they belong to the middle-class. Our society has placed so much emphasis on people’s economic standing that some have lost perspective.
Myth #2: I don’t need insurance until I’m old.—Or, I have enough insurance. The amount of insurance you need is based on several factors; age is only one of them. Additionally, we often purchase some form of insurance and then forget about it, thinking we’ve attained what we need. As life circumstances change, your need for protecting your risk often changes, too. Insurance can be a safeguard for your personal income, your standard of living, and your legacy.
Myth #3: I can’t afford professional advice.—It’s true that many people have seen their assets decrease; some may even be suffering from other economic distress. The short-term cost of professional advice, however, may be minimal compared with the long-term cost of not obtaining the assistance you need to take action and stay on track. Consider the cost of your sanity—and the idea that you could gain some peace of mind by tackling these issues. While most fee-based planners charge a minimum annual retainer, it is possible to find a planner who will consult with you for an hourly rate. People who really go through this process in depth have reported that the fee was incidental to the value for their life.
At a minimum, you may want to check out the following websites:
- www.mint.com—budgeting information
- www.bankrate.com—bank lending rates
- www.annualcreditreport.com—credit reporting information
- www.AARP.com—consumer information
There is a wealth of professional guidance available to you. You can counter the challenges ahead with solid planning and positive action.
Let Us Know What’s on Your Mind
What’s on your mind as you try to navigate the current financial environment? Please forward all questions relating to your financial life to Beth Jones at bjones@thirdeyeassociates.com. I will respond in this column within the guidelines of FINRA regulation which prohibits me from giving specific advice without understanding your entire personal financial situation. I will make every effort to address your questions and concerns by presenting what I see as possible solutions. Information provided here should not be construed as advice specific to you or replace professional advice from a trusted advisor.
Beth Jones, RLP® is a Registered Life Planner and Financial Consultant with Third Eye Associates, Ltd, a Registered Investment Adviser located at 38 Spring Lake Road in Red Hook, NY. She can be reached at 845-752-2216 or www.thirdeyeassociates.com. Securities offered through Commonwealth Financial Network, Member FINRA/SIPC.
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