The Most Important Action You Can Take For Your Financial Well-Being
The amount of advice that can be given about getting your financial affairs in order is plentiful. So many actionable steps can leave you overwhelmed. I want to narrow it down for you to the single most important action you can take, PARTICIPATE. I know it seems too easy but annual participation can help your financial wellbeing. It is important, at all stages of life, and income brackets.
Here’s why…
Participating when you are young is important. You can do this by making contributions a part of your budget. Not only does this create good behavior (hopefully for years to come) but it also gives you the advantage of the time value of money. Whether you participate to your employer sponsored 401K or you simply start an investment account, this small step can make a huge difference for your financial well-being.
Participate by knowing where your money goes. It’s easy to watch it come in and go out and not know exactly how it is being divided. Knowing the numbers and understanding how you can make your money work for you is imperative. It’s admirable if you can set up a budget also. The goal here is to see where money outflows so that you can make better decisions. Hopefully creating a strategy to pay off debt, save and furthermore invest.
Participate together. Having both spouses actively participate in the financial process is positive if you are married. Often, one spouse does the finances while the other takes on a more laid-back and less involved status. It’s important that both parties work together and actively agree on money decisions. Having both spouses participate will hopefully improve the buy-in rate from both parties, meaning you’ll be more successful working together.
Participate by having an annual review with your financial advisor. While most advisors review accounts, there are no guarantees. Are you still on the right track? You also have a duty to follow this process. You need to keep your advisor up to date on changes that may affect your financial future. Getting married, having a child, changing jobs, making a large purchase, or changing retirement plans are just a few triggering events that may change your financial plan. An annual meeting with your advisor is the best way to make sure you are keeping them up to date while they are actively reviewing your accounts.
Admittedly, we’ve asked you to do more than just one step for your financial well-being. Ultimately if you can commit to participating in just one or two steps annually you will be more aware of your finances and hopefully be more successful while avoiding some missteps. If it’s too overwhelming, then find a financial advisor who can guide you through the process.
The content of this blog is for informational purposes only and should not be construed as investment, tax, or estate planning advice. Skyline Advisors, Inc. is an SEC Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where representatives of Skyline Advisors, Inc. are properly licensed or exempt from licensure. If indices are referenced in marketing material, it is important to note that these cannot be invest in directly, any vehicle such as Passive index-based ETFs and Mutual Funds which attempt to replicate indices have internal expense ratios and other associated costs that would negatively impact returns. No advice may be rendered unless a client service agreement is in place. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital.
