Weighing the Need for a Financial Advisor

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Weighing the Need for a Financial Advisor

Do I really need a Financial Advisor?

I’ve seen mixed opinions on this question: No, just open a mutual account and don’t pay anyone fees. Yes, absolutely, it’s too difficult to go it alone. I find the answer lies in taking stock of you and your own personal financial situation. 

Are you working full-time, single, and attending night school? 

You have some money in the bank but still have bills to pay. 

Have you set the Wedding Date? Are you and your fiance both working with great incomes? Renting now but looking to purchase real estate and start a family. 

Are you recently divorced or widowed and now in charge of your financial future for the first time? 

Or, did you receive a large inheritance that you’re not quite sure how to best leverage? 

Are you starting your own business? Putting a big investment of your own money to get things rolling? 

From a personality standpoint, are you a very disciplined person who keeps track of everything? Or are you somebody who shoots from the hip? 

All these situations, and even our personalities and how you handle decision-making, can determine whether a financial advisor is right for you! 

Let’s dig a little deeper.

Understanding the Role of a Financial Advisor 

Many people assume that the role of a financial advisor is just to invest your money, but this is only one small portion of their job. A great financial advisor is someone who has studied, earned designations and certifications, and has years of experience managing a multitude of different situations that help their clients save money, minimize impacts on taxes, and create a roadmap for a healthy financial future. 

They’re professionals, just like a doctor, a dentist, or a consultant for your business. The role of a financial advisor goes beyond just number-crunching; it’s about establishing a relationship built on trust and mutual understanding. They are there to listen, educate, and empower you to make confident decisions for you and your family. Whether navigating life changes or planning for the future, a financial advisor brings clarity to complexity, guiding you toward your financial goals.

The Pros of Partnering with a Financial Advisor 

All of us have our unique financial situations that are typically compounded by our careers, income, children, extended family, health concerns, marriages or divorce, and more. All of these situations play a role in our financial future. It defines how you live, where you live, what you need to save, how to invest, tax savings, social security, and more. It can get complex very quickly. And, if you don’t have a professional to help you navigate these waters, talk through your financial goals, and learn about the pros and cons of different decisions – then you could find that you are not leveraging your hard-earned dollars the best way possible. 

There are many pros to partnering with a financial advisor, especially as your life gets more involved. Here are just a few benefits of working with a financial advisor.

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In your early years, a financial advisor can help you avoid costly mistakes when getting started. As you know, time is a huge factor when it comes to wealth. Getting off on the wrong foot can cost you wasted time, which equals less money. Hiring an advisor to help you get on the right path can help pay for itself many times over.

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If your plate is full or you have no desire to manage your investments, stay up to date with the market, and do research on your own, an advisor is essential. Doing nothing is not an option, so if we don't have time or energy, it is essential to delegate it to someone else who we can meet with, and they can help keep you on track to your goals.

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Sometimes, you can do all the research and still toss and turn at night wondering if you made the best decision. Meeting with an expert to look over your plan or double-check your work can make all the difference. Getting assurance from a professional and protecting ourselves from an expensive mistake can be a great reason to work with an advisor.

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At other times, you do your own studying, get too caught in the weeds , miss the big picture, and not make any progress. It's easy to do because there is so much noise and information, so deciding what's best for you as a unique individual can be hard. Turning to an advisor can help you look at the big picture and get your moving forward.

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Last but not least, an advisor can be there for you when life happens. When you receive that inheritance, get let go from a job, or get divorced, or any other event life throws your way, a financial advisor can be there in these emotional times when finances play an essential role. Having someone ready to help who is not fogged up by emotions, and who knows how to proceed can be essential when going through a hard time and still needing to make the most of your money.

So, if you find yourself in situations like these where financial decisions need to be made, it may be time to hire a financial professional. A great financial professional is your personal finance guide, leading you through the complexities of financial planning and decision-making with a tailored approach. They excel at creating strategies that can align with your specific needs and goals based on your unique financial situation. This is so important because you know that one size does not fit all. Having a personalized strategy for you and your family is the way to make sure that your hard-earned money is aligned with your future goals and dreams.

When Going It Alone Might Make Sense 

Navigating your financial journey independently may seem daunting, but for some, it’s a path that aligns well with their skills, knowledge, and personal preferences. If you’re someone who thrives on diving deep into financial planning, understanding market trends, and making informed decisions based on your research, steering your finances without a financial advisor could be right for you. 

This route might be particularly appealing if you enjoy the challenge of managing your investments and have a clear grasp of your financial goals and how to achieve them. For those with a strong foundation in financial literacy and a disciplined approach to their finances, the satisfaction of crafting and following through on a personal financial plan can be rewarding. 

Of course, you have to honestly assess your capacity to stay up-to-date on financial laws, strategies, and products to ensure your approach remains effective and aligned with your objectives. Venturing into financial planning on your own terms can be empowering for some but a costly mistake for others. 

How to Choose the Right Financial Advisor 

When you look for a financial advisor, it’s similar to finding a new doctor or personal trainer – it’s about discovering someone whose expertise, approach, and personality fit with your own. Start by being clear on what you specifically need help with – be it retirement planning, investment management, or navigating a life change like divorce. 

When you go to PurseStrings.co, you know that all the professionals have been vetted and approved to serve a female market. These professionals have all had conversations with Purse Strings, sharing their unique approach to women, their passion for the work, and the unique designations that set them apart.

When sorting for the right professional, look for advisors with certifications such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA). These signify a level of proficiency and commitment to ethics in financial planning. There are many designations out there with different specialties, like the Retirement Income Certified Professional (RIPC), Chartered Retirement Planning Counselor (CRPC), and Chartered Retirement Plans Specialist (CRPS) as specialties for retirement, so look at each professional to see if their specialty aligns with what you need. 

Also, look at how they charge for their services. Some professionals charge fee-only, fee-based, AUM, or more. Read this blog to learn more about financial advisors’ fee structures. 

Ask questions! Think about it, you are looking to hire a professional with whome you will be getting financially naked, so you want to be sure this is a person you can trust. Look for an advisor who will answer all your questions. One that explains things to you so that you clearly understand the decisions you are making. And, ask how much they charge. Ask how often you will meet. Ask how you can best reach them if you have questions. Ask all your questions so that you have a really good idea and understanding about the financial advisor. You want to be confident that this is a person you could trust.

Meet with a few different financial advisors and select the one you find resonates best with what you need. Choosing the right financial advisor is a pivotal step towards working in partnership to reach your financial goals.

 

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Investing Does Not Equal Financial Planning

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Investing ≠ Financial Planning

When the subject of personal finance and planning for the future comes up, the topic of investing often dominates the conversation. While investing is indeed important and plays a significant role in achieving financial goals, it should not overshadow other essential components of a comprehensive financial plan.

Financial planning is the process of developing a roadmap for your journey towards achieving well-defined goals and objectives. However, it’s important to recognize that the route will undoubtedly encounter roadblocks and other obstacles along the way which will require detours and updates in order to arrive at your final destination – financial freedom.

Picking the “best” mutual funds, ETFs, individual stocks and “alternative” investments or trying to outperform the S&P 500 Index is not financial planning. Don’t let anyone tell you otherwise. It’s much more. It involves assessing your current financial situation, addressing your concerns and questions, establishing goals, and developing strategies – including, but not exclusively, investing – to reach those goals effectively.

Financial planning recognizes the relationships between a number of equally important components and prioritizes financial well-being, adaptability and flexibility over the pursuit of short-term investment gains. These include: 

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Budgeting and Cash Flow Management:

Develop a detailed spending plan outlining income sources and all expenses, including fixed costs (e.g., rent/mortgage, utilities) and discretionary spending (e.g., entertainment, dining out).
Track expenses to identify areas for potential savings and ensure that income exceeds expenses, allowing for savings and investments.

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Debt Management:

Evaluate existing debts, including credit card balances, student loans, auto loans, and mortgages.
Develop a plan to prioritize debt repayment, potentially consolidating high-interest debts and utilizing debt repayment strategies to reduce interest costs and accelerate payoff.

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Emergency Fund:

Establish an emergency savings fund to cover at least 3-6 months’ worth of living expenses.
Keep emergency funds in a readily accessible, low-risk account (e.g., savings account or money market fund) to address unexpected financial setbacks without relying on debt or liquidating investments. 

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Insurance Coverage:

Assess insurance needs to protect against unforeseen risks, including health insurance, life insurance, disability insurance, property insurance (homeowners/renters), and liability insurance.
Ensure adequate coverage levels based on personal circumstances, family composition, and financial obligations.

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Tax Planning:

Optimize tax efficiency by leveraging tax-advantaged accounts (e.g., 401(k), IRA, HSA) and maximizing deductions, credits, and tax-deferral strategies.
Strategically manage taxable events (e.g., capital gains, retirement distributions) to minimize tax liabilities and maximize after-tax returns.

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Retirement Planning:

Estimate retirement needs based on desired lifestyle, expected expenses, and retirement age.
Develop a retirement savings strategy, including contributions to employer-sponsored retirement plans (e.g., 401(k), 403(b)) and individual retirement accounts (e.g., IRA, Roth IRA).
Consider factors such as Social Security benefits, pension plans, and potential healthcare costs in retirement.

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Life Happens (Scenario) Planning:

The best laid plans do not stop life from happening.
Typical scenarios requiring special, or sometimes immediate, attention range from marriage, children, leaving the workforce to care for aging parents and inheritances to divorce, career transitions, and early retirement.

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Estate Planning:

Create or update essential estate planning documents, including wills, trusts, powers of attorney, and healthcare directives.
Designate beneficiaries for retirement accounts, life insurance policies, and other assets to ensure proper distribution according to your wishes.
Minimize estate taxes and probate costs by implementing appropriate estate planning strategies.

So, while there is no argument that investing is an important piece of the equation, it is not financial planning.

True financial planning involves examining your entire financial picture, understanding how all of the pieces fit together and educating and empowering you to make informed decisions with confidence.

• This post is general education – not investment, tax, or legal advice •

 Christopher Lazzaro, ChFC®

Christopher Lazzaro, ChFC®

Founder and President at Plan For It Financial, LLC

Following a more than 30-year career in investment management and insurance, I founded Plan For It Financial. In doing so, I followed my passion for helping others gain a deeper understanding of their personal finances. Distilling complex financial topics and presenting them in a straightforward manner is central to my approach and process. I take great pride in and am grateful for the opportunity to guide clients as they navigate the challenge of balancing living for today, while maintaining an eye toward the future. Bridging this gap through education, realistic goal setting, establishing priorities, and practical, actionable advice without the unnecessary layers of financial jargon and complexity is my firm’s primary value proposition.

Life Planning: Aligning Your Spending With Your Values

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Life Planning: Aligning Your Spending

With Your Values

Money matters. It plays a meaningful role in our lives. It allows us to experience many things. But money isn’t everything. As a financial advisor, I’ve talked to potential clients interested in financial planning who wonder how much money they need to save for retirement. For most, that’s not the right question. What if you spent your money with more purpose and used it for what matters most to you? Instead of asking how much money you need, try asking yourself different questions, such as the following:

  • What kind of life do I want to live? 
  • What would my most fulfilling life look like?
  • Am I spending my money on what matters most to me? 

Asking these questions can help you better align your spending with your values. It can also help you live your life with more purpose. 

At Apprise, we favor life planning over traditional financial planning. We view life planning as financial planning done right.

At its core, like a financial plan, a life plan provides a comprehensive strategy involving budgeting (or cash flow), investing, and saving money. Financial plans also reflect your short- and long-term goals as well as your values and lifestyle choices. A typical financial plan focuses on the following areas: 

  1. Your Goals: Whether you want to start a family, buy a house, start a business, save for your child’s education, or go on a vacation every year, financial planning can help you achieve your goals. 
  2. Debt Management: Debt can materially hamper your financial picture. Financial planning can help you manage it effectively. 
  3. Asset Protection: You never know what might happen. Financial and estate planning can help you protect your assets and the financial security of you and your family.
  4. Retirement Plan: Retirement results in significant change. Financial planning can help you plan for it and allow you to save and invest enough funds to support your lifestyle.

Life Planning Goes Deeper

As noted above, life planning represents financial planning done right. A life plan is about more than money. It helps you create a roadmap for your future that aligns with your values and goals. It helps you determine what matters most to YOU! Having a life plan often allows you to live a healthier and more fulfilling life.

It’s Not All About the Money

Yes, money matters. There are some things you can’t do without it. That’s why you should invest and save for the future, so you don’t have to work your entire adult life. When it comes to investing, you can find countless stories talking about beating the stock market. Very few investors can do that with sustained success. This has led to more widespread use of a passive investment approach. Passive investing involves investing in funds that mimic an index. 

Beating the market refers to the idea of achieving higher returns on your investments than the overall market. Investors who attempt to beat the market pick individual stocks, time the market, or follow the advice of financial experts. They rarely, if ever, experience consistent success. 

Trying to beat a benchmark normally means holding riskier investments. Assuming more risk also means your portfolio will likely fall even more when the market declines. Big losses can jeopardize your future much more than failing to match a large gain. Think of it this way: If an investment you paid $100 for falls 40% to $60, it will have to increase by 67% to get back to even. That’s a big hurdle. An investment that falls 20% only needs to deliver a 25% gain to get back to even.

Consider a Diversified Portfolio

What if you decided to allocate your assets and hold a diversified portfolio? Your gains might not be as great, but your losses should be smaller. Plus, a diversified portfolio usually has less volatility than one that’s more concentrated. Diversification should help reduce the amount of fear you feel when the market declines. Emotions can cause us to sell out of fear and buy out of greed. I believe these are two of the worst things we can do as investors. 

In addition, trying to beat the market can also be much more time-consuming. It takes longer to select your investments. You need to spend more time monitoring your investments. More time may be spent making changes to your portfolio, too. All of this can lead to increased stress and anxiety.  

Holding a diversified portfolio should reduce your stress levels as well as the time spent managing the portfolio. It should also lower risk and volatility.

Living Your Desired Lifestyle

If you live your desired lifestyle, you prioritize your values, goals, and priorities over chasing investment returns. Your financial plan and spending should align with your lifestyle choices and priorities. You experience the benefits that come from enjoying the present while building wealth for the future. 

Implementing a Life Planning Approach

When creating a financial plan, many advisors and their clients focus on financial goals and investments. This causes them to overlook the broader picture of their overall life goals and aspirations. But a successful financial plan should be about more than accumulating wealth. It should help you align your finances with what matters most to you.

Apprise has implemented a life-planning approach, and my business partner and I each hold the Registered Life Planner (RLP®) designation. While the full life-planning approach is relatively new for Apprise, those who have been through the process have provided positive feedback. It helps them get a clearer picture of both where they stand today and what their future can look like. It also helps them better understand what matters most to them.

Defining Life Planning

Life planning represents a comprehensive approach to financial planning. It still takes your financial goals into account. But it does much more. It also reflects your personal values, priorities, and aspirations. It aims to help you develop a clear understanding of what you want to achieve in life. 

Taking a more holistic approach to financial planning through life planning allows you to create a financial plan that not only builds wealth. Your plan will also support your broader life goals.

At Apprise, we follow the Kinder Institute’s EVOKE process:

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    Exploration:

    During the exploration meeting, the advisor provides you with an opportunity to speak about what matters most to you. The advisor’s role during this meeting is mostly to listen.

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    Vision:

    During the vision meeting, the discussion centers on your response to the three Kinder questions. These can be summed up as follows:

        • Design Your Life.
        • You Have Less Time.
        • Today’s the Day.
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    Obstacles:

    During the Obstacles meeting, the discussion focuses on what can keep you from living your most fulfilled life

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    Knowledge:

    At this point, your advisor applies his or her knowledge to help you formalize your financial plan.

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    Execution:

    Now it’s up to you to achieve the goals laid out in your life plan.

    In this blog post, I discuss the life planning process in more detail. I also share my personal life plan.

    An Ongoing Process

    Life planning is not a one-and-done deal. It is an ongoing process requiring regular review and revision. Your life circumstances and priorities can change. This means your financial plan may need adjustments as well. For example, if you experience a job loss, marriage, divorce, or the death of a spouse, you will likely need to revise your financial plan to accommodate those changes. Any of those events could also be a good reason for you to work on your life plan if you don’t already have one, too.

    In fact, at Apprise, we focus on working with women facing new beginnings. For women facing significant transitions, we know that it’s stressful trying to understand how to bridge the gap between where you are and where you want to go. We are committed to taking care of the financial aspects of these transitions so that our clients can focus on the lives they want. Our life planning process helps you determine what it is that you most want from your life. You are welcome to download our free e-book. It provides five steps to help women facing new beginnings flourish through life’s big

    Conclusion

    In conclusion, life planning helps you to determine what matters most to you. It accomplishes this by taking a holistic approach that helps you identify your priorities and align your spending with your overall life goals and aspirations. Understanding your values, priorities, and life goals allows you to create a financial plan that supports the lifestyle you want to live. Remember, life planning is an ongoing process that requires regular review and revision to ensure that your financial plan continues to align with your changing life circumstances. With a life planning approach, you no longer need to think about building the biggest portfolio. Instead, you create a financial plan that does more than build your wealth. It also supports your broader life goals. If you would like to discuss your life plan with us, you can schedule a free, no-obligation call using this link.

    Philip H. Weiss, CFA, CPA, RLP®

    Philip H. Weiss, CFA, CPA, RLP®

    Financial Advisor at Apprise Wealth Management

    The 5 Best Financial Literacy Books for Women

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    The 5 Best Financial Literacy Books for Women

    The calendar may say that April is financial literacy month, but that’s every month here at Purse Strings. In fact, it’s every day, every thought, and every post. Our mission is always to ensure women have great, easy-to-use financial tools and resources at their fingertips 24×7. Life can change in a minute, and before you know it, something changes, and now you have financial questions or concerns.

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    You got a big, fat bonus! Go you! Should you invest? Pay off those student loans? Put a down payment on that new car you’ve been eyeing. What’s the best financial decision?

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    This is the year you are finally going to live your life’s dream and own your own business. Your prototype has great traction, and now you are going to make it real. You need help with funding, cash flow, booking, and accounting. Where do you start?

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    You knew it was coming, but it is still unreal. You never entered marriage thinking you’d ever get divorced. But here you are, planning your financial future on your own. What’s the best way to go about it?

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    You're finally making some money. You have cash in the bank, maxed out your 401k, are thinking about getting married, and want to have a game plan for your financial future. Is it time to be an “adult” and meet with a financial planner?

    It’s terribly unfortunate that financial literacy was never taught in schools. It’s like being given keys to a car without any instruction or test runs. And one month dedicated to financial literacy is just a reminder that we got jipped. So many of us faked it, did the best we could, or made mistakes that were hard to climb out of.

    But that all stops with Purse Strings.

    Learning about your finances or becoming financially literate all starts with getting a handle on where you are today so you can create a game plan to move confidently into your future.

    And, it doesn’t happen in a month or even a year. It’s a lifelong learning event.  

    At Purse Strings, we have fantastic go-to resources you have used to help you on your journey.

    If you were my BFF, and let’s face it, if you are reading this blog, then I consider you my friend, then these are the books I would highly recommend. Many are written by our fabulous Purse Strings Approved Professionals.

    As we focus on our financial literacy, here are five books to help you on your journey!

    Messages from Money by Ellen Rogin

    Ellen is the best. She approaches money from a much different perspective. She views money like a friend or partner. Different, right?  Messages from Money explores your relationship with money, emphasizing that you have one whether you realize it or not. By viewing money as a friend or partner, the book prompts reflection on your attitude—whether caring, supportive, distrustful, or fearful. It guides you to shift from worrying about money to welcoming it and leverage financial intuition for prosperity.  Ellen is a former financial advisor, and her unique approach enhances traditional strategies and cultivates a healthier money relationship

    I Now Pronounce You Financially Fit by Pam Friedman.

    Pam is our expert on all things divorce!! She is super smart and her book, I Now Pronounce You Financially Fit, highlights a crucial truth that divorce is a financial planning concern often overlooked in marriages. Pam Friedman stresses the importance of discussing investments, income, budget, and the potential financial impact of divorce early on. Despite the focus on trust and love in marriage, the book addresses the reality of a fifty percent divorce rate and provides guidance on protecting finances in marriage and navigating divorce if necessary.

    Breaking Money Silence by Kathleen Burns Kingsbury

    KBK is another one of our esteemed professionals and a wealth psychology expert. In her fifth book – Break the Silence on Money Talks – Kathleen Burns Kingsbury, addresses the taboo of discussing personal finances. She provides practical tools to navigate tough conversations, understand your beliefs about wealth, communicate openly with loved ones, and tackle financial issues with aging parents and partners. Through Money Talk Challenges and real-life stories, KBK guides you towards a more financially secure and literate future.

    budgeting guide | creating a budget

    The Fiscal Feminist by Kimberlee Davis

    Kimberlee Davis is a wealth manager and podcast host, and she shares strategies in her book to help women achieve financial wellness independently. Davis covers all the basics like how to overcome obstacles, align career choices with financial goals, secure fiscal freedom, protect your relationships, plan for retirement, mitigate risks, and invest for independence.

    We Should All Be Millionaires by Rachel Rodgers

    This is a book I wish I wrote! Rachel Rodgers is a mother of four, attorney, business owner, and self-made millionaire. She shares valuable lessons from her wealth journey and how she coaches women to seven figures incomes. She challenges the notion that earning more money is selfish, provides a historical perspective on wealth inequality, offers strategies to make empowering financial decisions, emphasizes setting higher income goals, and presents practical tips to boost your bank account quickly. Listen to this one on audible while you’re out walking. She reads the book and her sassiness and encouragement comes through every word! It will put a pep in your step for sure! 

    These are my thoughts on financial literacy. It’s really about being a lifelong learner of how money works, using the resources available to you to make smart financial decisions as money concerns change or pop-up. It’s learning about and leveraging resources so that you are confident to pivot and adjust financially as you navigate your livelihood, 

    Purse Strings is here for you and for all women so that they can live a financially fearless life full of choices.   

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    Are You Committing Credit Sabotage

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    Are You Committing Credit Sabatage?

    Our credit history follows us everywhere, painting a picture of our spending habits from yesterday and today. From it comes our credit score, a unique rating based on five components—payment history, loan balances, length of credit, credit inquiries and credit mix. We know the better our score, the better our chances at getting a loan approved with a great interest rate.

    Would you be shocked to learn that you may be causing your credit score to drop? Before you find out the hard way, check out the five ways you may be sabotaging your credit score and what you can do about it.

    CREDIT SABOTAGE #1: TOO MANY INQUIRIES.

    The more times you’ve applied for credit, the more credit inquiries will be on your credit report. Any number over six is excessive and will have a negative impact on your credit score. Not only that, too many credit inquiries are a red flag to a lender. AVOID SABOTAGE: Credit inquiries make up 10% of your credit score, so use caution when applying for loans or store credit cards. Each loan application results in a credit inquiry which can drag your score down.

     

     

     

    CREDIT SABOTAGE #2: TOO MANY CARDS.

    Lenders rely on your credit report to calculate your debt-to-income (DTI) ratio. The DTI compares your monthly income to your monthly debt payments. Every open account on your credit report is factored into the DTI calculation, even accounts without a balance. The more credit you have, the higher your DTI could be. If your DTI is TOO high, your loan application may be declined. AVOID SABOTAGE: Limit the number of open credit card accounts you have. If you have an excessive number of store cards, consider closing the accounts. (Be careful! You could lower your score if you close too many cards at once.)

     

    CREDIT SABOTAGE #3: ACCOUNT IMBALANCE.

    Lenders want to see a healthy mix of installment loans and revolving credit (like credit cards or lines of credit) on your credit report. If you have too many of one or the other, it may cause your score to decline. Lenders want to know that you can manage a variety of types of credit, which is why credit mix is important and accounts for 10% of your credit score. AVOID SABOTAGE: Request a copy of your free annual credit report and verify what types of accounts you have. Do not open credit accounts just for the sake of improving your credit mix, though. The extra debt could hurt your score (and financial position) eventually.

     

    CREDIT SABOTAGE #4: FRAUD OR INCORRECT INFORMATION.

    When was the last time you reviewed your credit report? If there is incorrect information or if you have been the victim of identity theft, chances are your credit score is taking a hit. The longer these mistakes go on, the more your credit will suffer. AVOID SABOTAGE: Visit the Consumer Finance Protection Bureau for detailed instructions on how to set fraud alerts or dispute errors on your credit report.

     

     

     

    CREDIT SABOTAGE #5: YOU’RE A CO-SIGNER. You may be tempted to help a friend or family member by co-signing on a loan. If you do, understand the consequences. If there is a default on the loan, the lender will turn to you for loan repayment. Your debt-to-income ratio may be impacted, too. Know the risks before signing on the dotted line. AVOID SABOTAGE: Ask the tough questions before you become a co-signer. Find out why the lender is seeking a co-signer. Most often, the applicant has little or no credit history, so they are a greater credit risk. Do not sign until you have given the request serious consideration, and know that you have the right to say “No.”

    Not sure where to start? Take the first step in preventing credit sabotage and preserving your credit score by grabbing a copy of your credit report today! Visit www.annualcreditreport.com to request your free copy from all three credit reporting agencies: TransUnion, Equifax, and Experian.

    Sara Hobbs

    Sara Hobbs

    Personal CFO & Cash Flow Coach at Stewardship Advisory Services, LLC

    My specialty is making personal money management simple and stress-free! As your Personal CFO & Bookkeeper, you can hand off the heavy lifting of managing your personal finances to me. No need to spend your downtime combing through a spreadsheet when you can outsource your personal banking and budgeting basics to a finance professional.

    Family Financial Planning Strategies You Need to Know

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    Family Financial Planning Strategies You Need to Know

    Here’s an overview:

    Setting Financial Goals as a Family

    What does it mean to set financial goals as a family? It’s about more than just numbers; it’s about aligning our aspirations and working together towards a brighter future. From personal experience with family financial planning, open communication is key. By discussing our goals openly, we foster trust and understanding within the family unit. Crafting a budget together ensures that we’re all on the same page, managing our finances effectively to reach those goals.

    Setting financial goals also serves as a valuable lesson for our children. It teaches them about the responsibility of money and how it works. They learn that priorities are important, and not everything can be priority number one. By setting both short-term and long-term goals, we instill in them the importance of planning for the future.

    And when we achieve our targets, big or small, it’s essential to celebrate the wins as a family. It reinforces our commitment, boosts morale, and sets the stage for future successes.

    Creating a Realistic Budget for Your Family

    Setting financial goals is also about managing effectively! First, find out where your money is going (or how your cash flows) in and out of your household on a monthly basis. Start by tracking all sources of income coming into the household. Sit down together and list out every bit of cash that comes in. Then, itemize expenses—rent or mortgage, utilities, groceries, and other regular costs.

    Next, allocate funds wisely. First, cover all of the essentials, like food and housing, and then set aside some money for any special events or trips.

    But remember, like any good plan, regular check-ins are required. It’s important to review progress periodically and make adjustments as needed to stay on track.

    By following these steps, you can become savvy money managers, achieving your family aspirations one step at a time.

    Saving and Investing as a Family

    Family financial planning involves setting both short and long-term goals together, fostering teamwork and shared responsibility. Once goals are set, it’s time to create a family spending plan. Work together to prioritize expenses and include savings and investments in the budget.

    Having open conversations about investing are important. This is how to introduce children to basic concepts and discuss various options to help them understand the importance of growing wealth over time.

    And let’s not forget to celebrate financial achievements! Acknowledging milestones reinforces financial responsibility and success.

    Managing Debt and Credit as a Family

    When it comes to handling debt and credit as a family, open communication is key. It is important to be transparent about financial obligations and work together to set joint goals for repayment and responsible credit usage.

    Teaching children about debt management and credit responsibility early on is crucial for their future financial success.

    Regularly monitoring credit reports as a family can help detect errors or fraudulent activity, ensuring our financial security and instilling good habits in our children.

    Teaching Kids about Money Management

    Educating children about money management is crucial for their future financial well-being. Starting young with concepts like saving through piggy banks or savings jars lays a solid foundation. As they grow, involving them in family budget discussions sets a positive example and teaches financial responsibility.

    This hands-on approach helps children understand the importance of setting financial goals, whether it’s saving for a toy or a family vacation. Teaching budgeting by distinguishing between needs and wants fosters smart decision-making.

    Encouraging kids to earn money through tasks or chores teaches the value of hard work and cultivates a strong work ethic that will serve them well in the future.  

    Protecting Your Family with Insurance

    Insurance is crucial for protecting your family’s financial well-being during unexpected events. Here are five essential types:

    1. Life insurance ensures your loved ones’ financial security in case of your passing.
    2. Health insurance covers medical expenses, prioritizing your family’s health.
    3. Disability insurance provides income if you’re unable to work due to injury or illness.
    4. Homeowners insurance protects your home and belongings from damages.
    5. Auto insurance offers coverage for accidents involving your family’s vehicles.

    Investing in these types of insurance upfront can be a game-changer for your family, providing security and peace of mind during challenging times.

    Planning for Major Expenses as a Family

    Engaging the whole family in financial decisions promotes transparency and unity. Setting clear goals together prioritizes saving for major expenses like education or vacations, aligning everyone towards common objectives. Establishing a family spending plan ensures everyone is dedicated to achieving financial goals together.

    Teaching children about saving for big expenses early instills valuable financial habits. Seeking professional advice can provide tailored strategies to optimize resources and secure a stable financial future for the entire family.

    Estate Planning for the Whole Family

    Planning for the future means taking care of the whole family. Estate planning ensures your assets are distributed as you wish. Designating beneficiaries in a will or trust provides security for loved ones. It can also involve setting up guardianship for minor children. A comprehensive plan helps minimize stress and disputes among family members.

    budgeting guide | creating a budget

    Seeking Professional Financial Advice as a Family

    Securing financial stability and future security is vital for families, highlighting the need for professional financial advice. Partnering with a Purse Strings Approved Financial Professionals allows families to create a personalized financial plan aligned with their goals. This guidance empowers informed decisions on investments, savings, and retirement, enhancing their financial well-being. Working with an advisor brings clarity to complex concepts and offers valuable insights for navigating financial decisions as a family.

    Staying Committed to Your Family Financial Plan

    Staying committed is key. Set specific financial goals with your family and regularly review and adjust your plan together. Track your progress and celebrate milestones. Open communication is crucial; keep each other informed about changes or challenges. Don’t hesitate to seek guidance from financial professionals when needed.