It’s been quite an interesting start to the year for the US economy as we are now living in a rising interest rate and inflationary environment after a few years of historically low interest rates during the COVID-19 pandemic. So, as the US consumer is adjusting to this new economic climate, their preferences and goals may be changing, including spending habits and financial goals. Have your financial goals shifted this past year? Does your budget look different ? Are you focusing more on short-or-longer term goals? 

Well, if your goals and preferences have changed, you are not alone! We saw an interesting study that found as we are headed into 2023, many Americans are now focusing on shorter-term financial goals instead of long-term ones. In fact, according to Fidelity’s New Year Financial Resolutions study, surveying 3020 Americans, “more than half ‘53%’ say it’s more important to pay down credit card debt and set aside emergency savings over long-term objectives like retirement and college savings, and roughly half say they’re ready to ‘live sensibly’ or ‘plan ahead’. According to the data from this survey, there is a larger sense of financial pessimism than last year and many reported they feel they are in a worse financial situation than the prior year. 

While we know the start of this year as well as last year has been uncertain and a large adjustment for many with the banking crisis, rising interest rates and a higher cost of living, we found this statistic surprising. In a time where individuals are feeling financial doubt, it’s extremely important to seek financial education. Often times, individuals make financial decisions that are not beneficial purely because they are uneducated on the matter. Given this economic uncertainty we are facing and may continue to face in this new year, it’s important to not prioritize short over long-term goals or vice versa, but to make a well diversified plan that includes a way to save for both short and longer-term goals so that you are not derailing one piece of your financial plan. If you are feeling financially unsure or are uncertain how to separate your financial goals and make an achievable plan to reach them, we are here to help you! Email us at info@shermanwealth.com if you are interested or schedule a complimentary 30-minute call to discuss your financial needs and questions here! 

As February rolls in, it brings with it not just the season of love but also an opportunity to focus on another crucial aspect of our lives: our financial well-being. February is recognized as Financial Fitness Month, a time that can be allotted to assessing, improving, and fortifying our financial health. Just as we prioritize our physical fitness, nurturing our financial fitness is equally essential for a secure financial plan. So, let’s dive into how you can leverage this month to enhance your financial household with a comprehensive checklist:

1. Set Clear Financial Goals: Start by defining your short-term and long-term financial goals. Whether it’s saving for a vacation, buying a home, or planning for retirement, having specific, measurable objectives provides direction and motivation for your financial journey.

2. Review Your Budget: Take a close look at your income and expenses. Create or update your budget to ensure that your spending aligns with your financial goals. Identify areas where you can cut back or reallocate funds towards your priorities.

3. Track Your Spending: Monitor your expenses diligently throughout the month. Use apps or spreadsheets to track every purchase and analyze your spending patterns. This awareness will help you identify unnecessary expenses and make informed decisions about where to trim your budget.

4. Assess Your Debt Situation: Evaluate your outstanding debts, including credit cards, loans, and mortgages. Develop a strategy to pay off high-interest debt more aggressively while making timely payments on all accounts. Consider consolidating or refinancing debt to lower interest rates if feasible.

5. Build an Emergency Fund: Aim to set aside funds equivalent of living expenses in an emergency savings account. Having a robust emergency fund provides a financial safety net during unexpected setbacks like job loss, medical emergencies, or car/house repairs.

6. Review Your Insurance Coverage: Assess your insurance policies, including health, life, auto, and home insurance. Ensure that you have adequate coverage to protect yourself and your loved ones from unforeseen events. Compare quotes and consider adjusting your coverage if necessary.

7. Maximize Retirement Contributions: If you have a retirement savings plan, such as a 401(k) or IRA, maximize your contributions to take advantage of employer matches or tax benefits. Review your investment allocations and adjust them based on your risk tolerance and retirement timeline.

8. Invest Wisely: Educate yourself about investment options and strategies that align with your financial goals and risk tolerance. Consider diversifying your portfolio across different asset classes to mitigate risk and maximize returns over the long term.

9. Plan for Major Expenses: Anticipate upcoming major expenses, such as home repairs, education costs, or weddings, and start setting aside funds accordingly. Establish sinking funds or dedicated savings accounts to earmark money for specific purposes.

10. Seek Professional Guidance: If you’re unsure about certain financial matters or need personalized advice, don’t hesitate to consult a financial advisor. A professional can provide guidance tailored to your unique circumstances and help you navigate complex financial decisions.

As you embark on your journey to improve your financial household this February, remember that small, consistent steps can lead to significant progress over time. By following this checklist and prioritizing your financial well-being, you’ll be better equipped to achieve your goals, weather financial storms, and enjoy greater peace of mind. Let us know if you have any questions on accountability this month and how you can improve your personal financial situation. Email info@shermanwealth.com or schedule a complimentary intro call here.

As we approach the end of the year, it’s time to take stock of our financial well-being and ensure that we’re on the right track for the year’s end and beyond. As we head into December, it’s a good time assess our priorities and ensure we’ve covered all the essential tasks. In this blog post, we’ll discuss your End of The Year Financial Checklist, which includes some “do not pass go” items to check off before the end of the year. So, let’s dive in.

1. Take Your RMD (Required Minimum Distribution):

For those who have reached the age of 72, taking your RMD from retirement accounts is a crucial financial task. The deadline for RMDs is December 31st, so now is the time to calculate the amount you’re required to withdraw from your IRA or 401(k) accounts to avoid penalties. Consult with your financial advisor to ensure you’re taking the right RMD amount.

2. Check Your Contributions:

Before the end of the year, it’s essential to review and maximize your contributions to various financial accounts. This includes your retirement accounts, such as a 401(k) or IRA, but also other accounts like Health Savings Accounts (HSAs) or 529 Plans for college savings. Making the most of these contributions can help reduce your taxable income and grow your nest egg for the future. Confirm with your HR department or financial professional about your allowable contributions and deadlines.

3. Manage Cash Flows and Holiday Spending:

Your fall season spending can quickly build up before your eyes, with holiday spending and end of the year bills. To lighten the burden and ultimately avoid financial stress, create a comprehensive budget that accounts for holiday gifts, travel expenses, and entertaining costs. It’s important to strike a balance between enjoying the season and staying within your means, but planning ahead can help avoid any unforeseen surprises.

4. Tax Planning for the Spring:

Spring might seem far off, but it’s never too early to begin thinking about your tax situation. Take some time to assess your financial portfolio and plan accordingly so again, there are no surprise come tax season. Consider speaking with a tax professional or financial advisor who can provide guidance on effective tax planning strategies. You might also explore opportunities for charitable donations, such as a donor advised fund and explore tax-efficient investment strategies.

In this season of change and preparation, December 1st reminds us to prioritize our financial well-being. Your Year End Financial Checklist is a helpful guide to ensure you’re on the right track as we approach the year’s end. Similar to everything finance, building your personal financial checklist is unique to you and your family’s personal financial situation, so some of the items above may or may not apply to you. However, as we approach the end of the year, these are good concepts and ideas to think about to ensure you are maximizing your opportunities before year end. If you have questions, or are seeking help executing the tasks mentioned above, email us at info@shermanwealth.com or schedule a complimentary intro call here.

As the economy continues to adjust to this higher interest rate environment with future uncertainty on what the Federal Reserve will continue to do with hiking interest rates to combat high inflation, many individuals are too feeling an adjustment. We have been finding that many clients and prospects are needing to adjust and revisit their budgets in this environment, and pay closer attention to the amount of cash they have on hand. Do you feel this way too? Are you keeping a closer eye on your spending?  Have your spending habits changed or are you feeling the impact of higher prices? Let’s take a look at how Americans are feeling about their costs and spending. 

According to a survey from the Certified Financial Planner Board of Standards, “63 percent of Americans are concerned with purchasing necessities such as food, their job security (56 percent), paying their rent or mortgage (55 percent), saving money (82 percent), and the national economy (82 percent).” It’s clear that this higher cost of living is having an impact on the consumer. In fact, credit card balances are at an all time high while American’s emergency savings accounts are dwindling. According to a survey by MagnifyMoney, “Nearly 1 in 5 Americans admit they saved no money at all in 2021. While these stats are not meant to cause anxiety or stress, noting where the economy is a great reason to discuss intentional spending. 

Intentional spending and frequent check-ins on your financial plan and budget is crucial, especially in this environment. Whether you had a financial plan created for you years ago or just a few months ago, it’s extremely important to check in with your plan and budget often to ensure it still works for you. 

When you are intentional about your spending, you separate your wants versus your needs as well as your short and long term goals, creating buckets to achieve your different wishes. We find that many individuals don’t sit down to create a realistic budget and end up spending more than they bring in, resulting in negative cash flows and added financial stress. Along with intentional spending, finding an amount that you are comfortable with to sock away each month is a great way to stay responsible and build up your emergency fund. We just wrote a blog about the importance of a mid-year financial check-in which is a great opportunity to re-visit your spending, budget, cash flows, and savings strategy. 

The survey also found that “younger Americans were also more likely to make decisions that could impact them negatively long term, as investors under 45 were more likely to delay credit card payments (29 percent versus 17 percent) and delay loan payments (25 percent versus 16 percent).” We know that financial planning might not always be top of mind for you, especially if you are a young professional just starting out, but setting up a financial plan from a young age and making these financial tasks a priority can be extremely beneficial to your financial future. Delaying loan and credit card payments can be a very slippery slope and get far away from you quickly if not handled appropriately, so make sure you create a plan and budget that works for you to avoid getting yourself into a sticky situation. 

We know that financial planning can seem scary or overwhelming which is why here at Sherman Wealth make financial planning simplified. We take overwhelming topics and make them easily understandable for our clients to ensure we educate and help them every step of the way on their financial journey. If you have any questions and want to revisit your financial plan or spending habits, email us at info@shermanwealth.com or schedule a complimentary 30-minute call here. 

As individuals enter their golden years, it becomes crucial to have a financial plan already set in place and planned out. Prioritizing financial planning and goal setting from an early age will ensure a secure and fulfilling future. Older adults often face unique financial challenges, including rising costs, potential long-term care needs, and economic insecurity. This blog post emphasizes the significance of creating a solid financial plan while you’re building your family and career, setting clear goals, and highlights the role of financial planning in securing a stable financial future for aging Americans.

So, lets discuss the power of financial planning. Financial planning serves as a roadmap to navigate the complexities of life and provides a sense of control over one’s financial well-being. It involves evaluating current financial circumstances, creating a plan to achieve both your short-and long-term goals, estimating future expenses, and developing strategies to maximize savings and investments. By engaging in financial planning and creating a holistic plan as you kickstart your life path, older adults can proactively address their financial needs and aspirations, and ensure the ability to weather unexpected financial shocks.

According to the NCOA survey, a staggering “80% of households with adults over 60, equivalent to 47 million households, are at risk of falling into economic insecurity due to high inflation and rising costs”. This poses a significant challenge for older individuals, with 45% of them having household incomes below the threshold required to afford basic living needs. In fact, many of these individuals feel unprepared to whether a financial shock that may come their way. This shows the importance of having a plan in place and setting up a strategy to achieve both your short and long term goals.

Goal setting is an integral part of effective financial planning. It involves identifying specific objectives that align with your personal values and dreams. Whether it is retiring comfortably, purchasing a vacation home, covering long-term care healthcare expenses, or leaving a legacy for loved ones, goals are specific to you and your family. Setting achievable and measurable goals helps individuals stay motivated and track their progress towards financial security.

Financial planning and goal setting will play a vital role in preparing for your future and any unexpected financial shocks that come your way.  By creating a robust financial plan, individuals can navigate economic uncertainties, rising costs, and life goals effectively. If you have any questions about creating a financial plan and preparing for the future, email us at info@shermanwealth.com.

September is here, which means it’s time to start thinking about your financial goals and ensuring your money matters are in order. As the summer months wind down, it’s the perfect opportunity to revisit your financial plan, set new goals, and make sure you’re on track to achieve them. Here’s a financial checklist to help you navigate the financial waters this September:

1. Check Your Student Loan Portal: If you have student loans, you may have enjoyed a few years of reprieve thanks to the pandemic-related pause. However, as of this month, interest has resumed on federal student loans. It’s crucial to check your student loan portal to confirm and understand your liability beginning next month. This change could impact your monthly payments and the overall cost of your loans.

2. Benchmark Your 2023 Goals: At the beginning of the year, you likely set financial goals for yourself. Now is the time to revisit those goals and assess your progress. Take a moment to reflect on what you wanted to achieve in 2023, whether it was saving for a major purchase, paying down debt, or investing for the future. Evaluate where you stand in relation to those objectives and make any necessary adjustments. If you’ve met some of your goals, celebrate your accomplishments, and if you’re falling short, identify the steps needed to get back on track.

3. Review Your Retirement Contributions: Your retirement savings are a critical part of your financial future. September is an excellent time to review your retirement accounts and contributions. Are you on track to max out your contributions for the year? If not, consider increasing your contributions to take full advantage of tax-advantaged retirement account. Did you increase your contribution from last year to account for the increase in contribution limit, which is $22,500 and $30,000 for those 50 and older. Ensure your investment allocations align with your long-term goals, and if necessary, consult with a financial advisor to fine-tune your retirement strategy.

4. Revisit Your Cash Flows and Budget: As we transition from summer to fall, your expenses and financial priorities may change. Take a closer look at your cash flows and budget to ensure they reflect your current situation. Are there any upcoming expenses you need to plan for, such as back-to-school costs, holiday expenses, or home maintenance? Adjust your budget accordingly to accommodate these changes. Reevaluating your budget can help you stay in control of your finances and avoid any unexpected financial stress.

Bonus Tip: Consider Tax Planning Though tax season is still a few months away, proactive tax planning can save you money in the long run. Review your tax situation and look for opportunities to optimize your tax strategy. This might include taking advantage of tax deductions, tax credits, or making smart investment decisions with tax implications in mind. Consult with a tax professional or financial advisor to explore potential tax-saving strategies.

In conclusion, September is a prime time to get your finances back on track after the summer months. By following this financial checklist, you’ll be better prepared to tackle the rest of the year with confidence and ensure that you’re making the most of your financial resources. Remember that financial planning is an ongoing process, and regular check-ins like this one can help you achieve your short-term and long-term financial goals. If you have any questions or are seeking financial advice in your fall financial check-up, email us at info@shermanwealth.com or schedule a complimentary intro call here.

If you’ve been following major headlines in the media recently, you sure have read about interest rates, inflation, the Federal Reserve, and a potential recession. As the Federal Reserve recently implemented its 10th interest rate hike in its effort to combat inflation, many individuals continue to discuss the possibility of a looming recession on the economy. So, in response to the state of the economy with rising interest rates and inflation data, many individuals are revisiting ideas on their budgets and cash, stashing away more cash and cutting out unnecessary items from their budgets.

Although this week we saw retail sales increase 0.4% in April, indicating shoppers are picking up spending, over the last few months many Americans have cut back on shopping. According to recent reports from Bank of America Institute and Deloitte, American consumers are cutting back on their spending and saving more. In fact, now “71% of Americans are likely to keep cash on hand,” and “to save more, about half of all adults are dining out less frequently and 42% have changed the way they shop for food”. Given higher prices to purchase goods yet also higher interest rates available on cash, many individuals are starting to take advantage of getting paid more to save. 

Taking advantage of higher interest rates in this environment with your cash is extremely important and a great way to earn some extra cash. We’ve been talking about the best vehicles to park your cash in, including high yield savings accounts and CDs that are as high as the 5% range, earning well over the traditional bank account that’s still yielding around 0%. So, if you have adjusted your budget due to inflation and are finding yourself saving more cash, make sure you are maximizing the interest rate you can earn, making the smartest decision with your finances. If you have any questions about ways to best maximize your cash and your financial plan, email us at info@shermanwealth.com or schedule a complimentary intro call here. In an ever changing economic world, we believe that periodically revisiting your financial plan and strategies to align with the opportunities available to you is so important.