One of the primary goals young couples have is to pay for their child’s colleg. With these expenses increasing at an alarming rate, you may feel like you’re swimming upstream. Much like saving for retirement, saving for college needs to start as early as possible. Each year that passes by is one less year your savings has the opportunity to grow for you.
If you ask my fiancée what my favorite food is, she won’t hesitate to answer. It’s avocados. I make a large bowl of guacamole on almost a weekly basis. So when articles are written saying avocado toast is the reason why millennials aren’t saving for retirement, I take offense.
Baby Boomers are retiring every day and Generation X is right on their heels. With this, an increasingly large amount of wealth is making its way into IRAs and Roth IRAs. It has been my experience that individuals don’t quite grasp the complexities of such accounts.
Conversations with estate planning attorneys have led me to understand an interesting trend in human behavior. Individuals typically complete their estate plan at two stages in life: marriage and retirement. On one hand, this is good. Major life changes warrant a review of your estate plan and an update to your documents. On the other hand, this is not so good. Much like the other areas of your financial life, your estate plan needs to be reviewed on a regular basis.
A popular topic in behavioral economics is loss aversion. Studied extensively by Daniel Kahneman and Amos Tversky, loss aversion means you value something you already have at a level above what others would value it. Another way to look at it? You’d rather not lose $5 than find $5 you never had.
Being a business owner has responsibilities that extend far beyond running the actual business. The paycheck you provide your employees every two weeks helps them live their life. That money also goes back into the local economy as they purchase goods to support their family. Additionally, you have an opportunity to help your employees live a happy life beyond their regular wages.
Since I entered the workforce after graduating from Iowa State University in late 2010, I have been giving advice to others on how to put their money to good use. There are few things I enjoy more than having a conversation with a couple about such a complex subject. Along the way, I’ve pushed myself to learn more about specific financial planning strategies to be of greater value to my clients. Most recently, I’ve spent my study time learning about human behaviors and psychology.
As I drive around town these days, I notice a lot of cars with temporary license plates indicating they were recently purchased. What’s the reason for this? When I turn on the TV, I see a commercial for a local car dealership. They are offering to accept your tax refund as the down payment on a new car. Now it starts to make sense.
Most American families are living paycheck to paycheck. This really comes to light when Federal workers miss a few pay periods during a government shutdown. In fact, a Federal Reserve survey found almost half of Americans wouldn’t be able to cover an emergency of $400.
Every generation faces their own unique set of challenges. Timing plays a major role in the outcome of your financial life, whether you like it or not. In fact, a 2018 report by the Federal Reserve Bank of St. Louis explained this clearly. Their study looked at the connection between one’s birth year and financial well-being, or wealth.