Managing Your Finances for Your Health

Money is a curious thing – it is both a source of great enjoyment and a source of great conflict. We work tirelessly to earn more yet we never feel like we have enough. The pursuit of money brings people together collaboratively, but money is also one of the most common reasons that couple’s divorce. Is financial security really that elusive?

As a financial planner, I work with individuals, couples, and families to help them articulate their financial goals. I then review their current circumstances, identify opportunities and concerns and help guide them towards attaining those goals. Where most advisors focus on product sales which can build assets on otherwise shaky ground, I recommend strategies such as emergency preparedness, budgeting, and debt reduction to help clients establish a solid financial foundation upon which they can build wealth. Financial security is not about how much money you have but about how prepared you are to face life’s inevitable financial challenges. Financial stability can be summarized in three steps.

Save It

In order to work towards a financial goal, there must be a surplus – savings – at the end of the month or at the end of the year. Consistently living beyond your means is a one-way ticket to financial disaster.

Creating a surplus does not mean depriving yourself of all enjoyment. As the song goes, "You work hard for your money"; you should be able to enjoy it as well. People start having trouble when their sense of entitlement – the work hard, play hard mentality – diverges from their ability to afford both the necessities of life and the lifestyle they wish to have. Keeping in mind what fixed costs you have and then setting up a budget or allowance of fun money each month will allow you to enjoy your hard-earned income without putting your financial future in jeopardy.

Grow It

Make no mistake – investment markets are akin to legalized gambling. Without the help of a knowledgeable and trust-worthy advisor, many people rely on following trends to make investment decisions. All too often, by the time the individual investor learns of a trend, the trend has run its course.

Unfortunately, investing is necessary because inflation will erode the purchasing power of your money over time. Over the long-term, only equity investments (stocks and mutual funds containing stocks) will help you protect your money from inflation, so some involvement with investment markets is necessary. With that in mind, it is important to invest within your risk tolerance to help you manage through market corrections like the ones we have seen in the last two years. Exceeding your risk tolerance will result in added financial stress and poor decision-making.

Protect It

Part of the three-step process of financial stability is protecting what you have accumulated and those who are dependent on you. It is critical that your household have the financial and legal foundation to get by in case of prolonged unemployment or illness, or in case of the premature death of a wage-earner.

Strategies such as owning life and disability insurance, putting aside emergency funds, executing legal documents to name Powers of Attorneys in case of incapacity and Executors in case of death (or the equivalent for your state) are important ways to help your family cope with unforeseen challenges. While these are far from the “sexiest” financial planning strategies, they are the cornerstone of your plan – ensuring that your family can weather whatever the future brings.

Over the coming months, we will work together on the “Save It, Invest It, Protect It” mantra in order to protect your family, strive to achieve your financial goals, and help you to sleep better at night.

Disclaimer:

The information contained in this article is for general information purposes only. The information is provided by Monique Madan and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.