Identify Your Family's Financial Priorities

Posted on

Jan 26, 2016

Share This
Although the American family has always shown great resilience through the ups and downs of our dynamic economy, the slow recovery were experiencing now is compelling many to not only reconsider their priorities, but reevaluate the financial strategies they may have put in place only a few years ago.
Families and Finances
A recent study conducted by Forbes Consulting Group in 2013 titled, State of the American Family: Families, Financial Attitudes & Planning, found that families1 financial priorities are focused around 4 specific areas: Income, Savings, and Retirement.
The challenge for many of us is determining which of the four areas should be our primary focus. Ultimately, only you can decide where to put the majority of your financial efforts. Factors such as age, marital status, number of dependents and short- and long-term goals all will play a part in your decision making. Thats the easy part. The hard part is trying to balance all four at the same time which you will have to do - along with the rest of your day-to-day life.
Your income(s) is the source of funding for most everything you enjoy in life. In fact, when viewed over the span of your entire working life, your income may be your most valuable asset. For those whose priority is to use their income to build and accumulate assets for the future, your first step should be to protect your income (inquire with your employer regarding your Group Long Term Disability options), and, once secure, look for ways to increase or supplement it. What side hustle could you do in your free time to generate additional income?
If savings is your top priority (for the purchase of a home, a childs education, or other reason), view the sacrifices you make now as the foundation of building and accumulating wealth. First, create a budget that will identify how much, and for how long, you will need to save to reach your goal. Start your savings plan by creating an emergency fund (equal to six months of income), then investigate various savings vehicles available. Consider making arrangements to automatically withdraw money from your paycheck or checking account. Set it and forget it is an ideal way to save.
Regardless of your age or situation, retirement planning should be a priority for everyone. Once you have an idea about how much income youll need in retirement (70% of current income is a good rule of thumb), the simplest way to save for retirementis through your employers 401(k) or similar plan. If your employer does not offer a qualified retirement plan (or you are self-employed), create your own by using an IRA (traditional or Roth) or Self Employed Pension plan. Also consider whole life insurance. While primarily purchased for its death benefit, the build-up of the cash value in a whole life insurance policy is guaranteed, and can help give you a reliable source of supplemental retirement income.
Editors Note: This article was provided by Bradley Waller, a financial representative with MassMutual Financial Group; courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). Local sales agencies are not subsidiaries of MassMutual or its affiliated companies.
1. Access to cash values through borrowing or partial surrenders will reduce the policys cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.

Other Articles You May Like

The Top 5 Misconceptions about Long-term Care Medicaid Eligibility

What You Have HeardAsk yourself, was the info you heard from a Certified Medicaid Planner?Medicaid Misconception #1 - You can only have $2,000.FACTSSingle applicants have a resource limit of $2,000. (in 2024) A married applicant has a resource limit of about $150,000. (in 2024)Medicaid Misconception #2 - Your home will be taken from you if you are on Medicaid.FACTSAll applicants are allowed to have 1 home and 1 car. There are ways to avoid Medicaid estate recovery, an applicant can receive Medicaid and keep their home.Medicaid Misconception #3 - You make too much money.FACTS If you are over the income limit, Beneficent can provide the legal steps using the Medicaid code to bypass being over the income limit.Medicaid Misconception #4 - You must spend down to $2,000 to qualify for Medicaid.FACTSThis is an option, however not your only option. If you want to preserve the hard-earned assets you or your loved one has worked their entire life, you can!Medicaid Misconception #5 - Why doesnt everyone apply for Long-term Care Medicaid if the other outcome statements are true?FACTSMany are deceived by misinformation and preconceived notions. There's a game-changer you need to know about - Certified Medicaid Planners (CMP) - we know the rules and regulations.You can find all the CMPs in the United States here, (  there arent too many of us! Need to schedule an appointment with one of our Certified Medicaid Planners at Beneficent? Book here ( or call our office (719.645.8350) for more appointment times.

Slow and Steady: A smart way to invest

Youve probably heard stories about fortunate investors who get in the ground floor of a new, hot company and quickly make a fortune. But while these things may happen, they are exceedingly rare and often depend on hard-to-duplicate circumstances and they really dont represent a viable way of investing for ones goals. A far more tried-and-true approach is the slow-and-steady method.To follow this strategy, consider these suggestions: Start small and add more when you can. When youre first starting out in the working world, you may not have a lot of extra money with which to invest, especially if youre carrying student loan debt. But one of the key advantages of the slow-and-steady method is that it does not require large investment sums to get going. If you can afford to put away even $50 or $100 a month into individual stocks or mutual funds, month after month, you may be surprised and pleased at how your account can grow. And when your salary goes up, you can put away more money each month. Take advantage of an employers retirement plan. If your employer offers a 401(k) or similar tax-advantaged retirement plan, try to take full advantage of it. Again, if youre just beginning your career, you may not be able to put away much in this type of plan, but even a small amount is better than nothing. And as soon as you can possibly afford it, try to put in enough to earn your employers matching contribution, if one is offered. These types of plans can offer some key benefits and perhaps the biggest one is that investing is automatic, in that the money is moved directly from your paycheck into the investments youve chosen within your 401(k) or other plan. Be prepared for downturns. The financial markets will always experience ups and downs. So, you need to be prepared for those times when your investment statements may show negative results. By understanding that these downturns are a normal part of the investment environment, you can avoid overreactions, such as selling quality investments with good fundamentals just because their price has temporarily dropped. Chart your progress regularly. A key element of a slow-and-steady investment approach is knowing how well its working. But its important to measure your progress in a way that makes sense for you. So, for example, instead of measuring your portfolios performance against that of an external stock market index, such as the S&P 500, you may want to assess where you are today versus one year ago, or whether the overall progress youre making is sufficient to help you meet the financial goals youve set for yourself well into the future. Another reason not to use a market index as a measuring tool is that the index only looks at a certain pool of investments, which, in the case of the S&P 500, is simply the largest companies listed on U.S. stock exchanges. But long-term investors try to own a range of assets U.S. and foreign stocks, bonds, government securities, certificates of deposit, and so on. Slow and steady may not sound like an exciting approach to investing. But its often the case that a little less excitement, and a lot more diligence, can prove to be quite effective.  Chad Choate III, AAMS 828 3rd Avenue West Bradenton, FL 34205 941-462-2445 This article was written by Edward Jones for use by your local Edward Jones Financial Advisor. Edward Jones, Member SIPC

Creating a budget for senior living

Creating a budget for senior living is essential for financial stability and peace of mind. Here are some practical steps to help you or your loved one create a budget:List Net Income: Begin by listing all sources of income, including pensions, Social Security, investments, and any other funds. Be thorough to avoid underestimating or overestimating income.List Expenses: Identify fixed expenses such as rent or mortgage payments, utilities, car payments, insurance, and other regular bills. These are essential costs that need to be covered consistently.Track Actual Spending: Keep track of daily spending to understand where the money goes. This step helps identify areas where adjustments can be made.Identify Savings Sources: Consider any savings accounts, emergency funds, or other financial resources available. Having a safety net is crucial for unexpected expenses.Set Goals: Define financial goals. These could include saving for healthcare costs, leisure activities, or travel. Prioritize these goals based on their importance.Recognize Obstacles: Be aware of potential challenges, such as rising healthcare costs or unexpected emergencies. Planning for these obstacles ensures better financial preparedness.Seek Support: Consult with a financial advisor or counselor. They can provide personalized guidance and help create a realistic budget that aligns with your specific circumstances1.Remember that budgeting is an ongoing process. Regularly review and adjust the plan as needed to accommodate changes in life and financial circumstances. By following these steps, you can better manage your finances during senior living.