Four Guidelines for Financial Planning

By Matt DeBall

Financial planning is important, and it’s been great to talk about it this month. Marcia Shetler identified the new rules for financial planning for young adults in comparison to past generations. Jacqueline Painter of Everence highlighted the cost of making financial mistakes and led an awesome Live Chat about faith-based financial planning. Most recently, John Withum shared reorienting spiritual principles for financial planning.

As we conclude this month, here are four quick guidelines to help you with financial planning.

 Assess where your money is going

directory-235079_1280Do you have a budget? If not, consider forming one that reflects your goals and values. If you do have a budget, do your financial actions represent it well? Is there any way to modify your budget or spending habits to more closely put your faith, values, and goals into practice? Knowing how your money is used is a good first step in making changes and charting a course forward.

Ask a friend for help

It’s nice to be self-sufficient and learn new skills, but if you have a friend or family member who is well versed in handling their money, why not ask for help? There’s no reason to struggle on your own and you shouldn’t feel ashamed of asking for advice. (Note: rather than springing questions on your friend at a social gathering, ask if they would be willing to come over for dinner and talk about financial planning.)

Work with a professional

If you had a leaky pipe, you’d call a plumber. If you became very sick, you’d go to a doctor. These and other professionals have expertise and can help you more than you are able to help yourself. This includes financial advisors. If you’re in a difficult financial situation or anticipate one in the future, reach out to a financial professional and prevent current challenges from becoming worse.

Set one goal and stick to it

Financial planning can seem like a daunting task. Rather than trying to make many arrow-2886223_1280financial maneuvers all at once, set one attainable but challenging goal that will make a difference, and stick to it. Do you want to save more money? Consider where there is room in your budget to do so, and open a new checking or savings account to deposit that money after each paycheck. Improving your financial management one goal at a time is far better than becoming worn out or discouraged by trying to make many changes and not seeing much progress. Celebrate steps in the right direction and set new goals as old goals become habits.

About the Author

m-deball-9-2016Matt DeBall is the COMPASS Communications Coordinator for the Ecumenical Stewardship Center. He also serves as Coordinator of Donor Communications for the Church of the Brethren. He has an MDiv from Northern Seminary of Lombard, Illinois and a BA in Communication Arts from Judson University of Elgin, Illinois. He loves running, reading, and napping. He and Chelsea live in Northern Illinois with their Welsh Corgi, Watson, and attend the First Baptist Church of Aurora.

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you’ve read? Visit the COMPASS web page, follow us on Twitter, and join the COMPASS community on Facebook.

Image credits: pixabay.com

The Cost of Making Financial Mistakes

By Jacqueline Painter

When it comes to our physical health, many of us regularly visit with and get advice from doctors, nurse practitioners, and pharmacists. And when we have concerns about doctor-check-uprelationship issues, we often talk with our pastors, professional counselors and therapists. We know we don’t always have the answers we need, so it makes sense that we seek out the wise counsel of experienced professionals.

But when it comes to our financial decisions, a lot of us avoid thinking about it or try to do it alone, instead of asking for help—and that can be costly.

According to a 2012 report by the Consumer Federation of America, two-thirds of middle-class Americans said they had made at least one “really bad financial decision”, and nearly half acknowledged that they had made more than one bad financial decision. Eleven percent of these people said these bad decisions had cost them at least $50,000, and 2 percent said their losses had been $200,000 or more.

It’s difficult for us to be able to view our money and other financial decisions from every thinkingangle to see if we’re making good decisions or about to make a costly mistake. One reason likely is because talking and thinking about money can be emotional. Those emotions can get in the way of making good financial decisions. On top of that, determining your financial goals—much less accomplishing them—is hard work, especially when you’re not sure what decisions to make or don’t have someone to help keep you accountable.

Responsibly handling your financial resources is a multi-faceted journey, and one that can be complicated to walk through by yourself. Working with a qualified financial planner to develop a well-constructed financial plan can help you gain control of your finances, and get a clearer understanding of your short and long-term goals.

In general, a wide-ranging financial plan encompasses your entire financial life, including:

  • Cash flow Does it ever feel like your money is controlling you, instead of the other way around? If so, then you might need to take a closer look at your cash flow.
  • Protection planning. What would happen if a fire were to destroy your home? padlockWhat would your family do if they lost their primary source of income because of a death or disability? Obviously, there’s no way to know what will happen in the weeks, months, or years to But you can take steps now to have resources in place for your family and loved ones in case the unexpected happens.
  • Tax All of us are affected by taxes. And whether your finances are fairly simple or really complicated, our tax system can be pretty confusing. Because nearly every financial decision you make can have tax consequences, it’s important to understand how your taxes work and know what you can do to impact your tax situation.
  • Investment From retirement income to college funding, there are a number of reasons why we invest our money. But in order to have that money for our future needs, it’s important to think strategically about the way we are investing. This includes understanding your goals, objectives and risk tolerance, and then finding investments that match your needs and values.
  • Retirement planning. The biggest fear that many people have about retirement is running out of money, which is why you can never begin too early when it comes to retirement The sooner you start, the more time you have to determine how much you will likely need in retirement and how you might get there.
  • Estate Effective estate planning gives you the ability to direct your assets and plans in the event of your death. It also helps you make clear who should be the custodial and financial guardian of your children or other dependents, should you die unexpectedly. Without an estate plan in place, state laws and/or local court decisions will prevail, and they may not be what you wish to happen.
  • Charitable Being generous is an important way to live out your faith and values. give-moneyDeveloping a plan for your financial affairs will help give you the freedom to be more generous, so you can make an impact on the missions and ministries closest to your heart.

The end result is a complete financial plan that gives you the big picture of your current financial health and helps you get on the right path for the future. Planning for your financial life may be one of the best gifts you ever give to yourself and those you care about. It’s a way for you to gain control of your finances and avoid some potentially costly mistakes down the road.

JJacqueline_Painter_2017acqueline Painter is an Everence Financial Advisor at 841 Mount Clinton Pike, Suite A, Harrisonburg, Virginia 22802. Securities offered through ProEquities Inc., a registered broker­ dealer, member FINRA and SIPC. Advisory Services offered through Everence Trust Company, a Registered Investment Advisor. Investments and other products are not NCUA or otherwise federally insured, may involve loss of principal and have no credit union guarantee. Everence entities are independent from ProEquities Inc.

Image credits: pixabay.com