As we are officially in the spring season and approaching the end of the first financial quarter, we want to shed some light on some smart financial moves you can make as you start some “spring cleaning”. If you have yet to work on your financial checklist and goals for the year, this is your opportunity and reminder to get started now. So, let’s take a look at some financial tasks you can set for yourself this spring.

1. As the bond and stock markets digest the banking crisis, the economic uncertainty calls on us to take a look at what we have and where it is. Do you know what banks your cash is sitting in? Is it FDIC insured? Given all the craziness going on in the banking system, it’s important to make sure your money is FDIC insured and you are being smart with your dollars. 
2. Secondly, given where interest rates are and have been, park your cash in a high yield savings vehicle, earning up to 3.75%, and FDIC insured. If your money is still sitting in a large money center bank earning close to 0%, this is your opportunity to take advantage of higher interest rates. 
3. While capitalizing on higher interest rates, you might also want to take a look at your debt. Do you know what interest rates you are paying on your debt? Are your interest rates fixed or variable? Check out our blog on how rising interest rates may impact your wallet and your debt. As we are seeing huge fluctuations and increases in interest rates and are unsure what the future looks like for rate hikes, make sure you are staying on top of your debt payments and not letting interest get the best of you. 
4. Next, as we approach the beginning of April, we want to use this as an opportunity to discuss tax season. Are you prepared to file your taxes? Have you collected your tax documents and 1099s? Stay organized to avoid unnecessary late penalties or file for an extension if you know you will need one.
5. Lastly, another smart financial task you should set for yourself is re-visiting your budget. Given recent CPI data, and with food prices still at all time highs, make sure your budget still works for you and your family. If it’s been a few months since you checked your cash inflows and outflows, now is a good time to make sure you know what you are spending on and if you have more room to save. 

While these are only just a few financial tasks of many you should set for yourself, given the uncertain economic environment, revisiting your whole financial picture is extremely important. We know that keeping yourself accountable can be difficult, which is why we are here to help you tackle your financial homework and stay on the right track. If you have any questions or would like us to help you revisit your financial situation, email us at info@shermanwealth.com or schedule a complimentary introductory call here. 

 

As we are in the depths of tax season and making our way through the beginning of the year, we want to discuss some important financial dates and deadlines to keep in mind over the next few months. Financial organization is a large component of financial success. Staying on top of deadlines, compiling forms, filing your tax return before April 15th, paying your bills on time, and funding your accounts are just a few ways you can remain organized financially. For example, your 1099 may be ready for download, meaning you can get ahead of your tax filing this year. 

So, let’s take a look at some important dates that may impact you and your financial situation. If any of these dates apply to you, jot them down in your calendar or notebook so you don’t forget! 

February 15: Individual Exemptions Due (2022)

March 15: Tax due date for certain types of businesses 

April 1-30: Financial Literacy Month 

April 1: If you turned 72 in 2022, you have until April 3, 2023 to take your 2022 required minimum distribution 

April 17: Last call to fund your IRAs and HSAs 

April 18: Tax Day

June 15: Second Quarter 2023 estimated tax payment due 

September 15: Tax Extension Deadline for S-Corps and Partnerships 

September 15: Third Quarter 2023 estimated tax payment due

October 1: FAFSA forms become available 

October 15: Medicare Open Enrollment

October 16: Tax Extension deadline for individual and C-Corp returns

November 28: Giving Tuesday

December 31: Last call to fund your 401(K), Donor Advised Funds, 529 Plans 

While these are just a few financial dates that stick out to us, this is a good starting point when getting financially organized. If you have any questions about these deadlines, let us know and we are here and happy to help. Of course, everyone has a different specific financial situation, so its important to fully understand yours and speak with a financial professional if you are unsure. Email info@shermanwealth.com if you have any questions or schedule a complimentary introductory call here. 

As we reflect on 2022 and digest the economic volatility we saw last year, the need for having and financial plan seems more urgent. With high inflation levels, an increased cost of living, and rising interest rates, we’ve been hearing from many individuals that they do not feel financially confident or secure. Interestingly enough, it has been revealed that many Americans do not have a financial plan or are letting the current economic uncertainty derail their original plan. In fact, “nearly 70 percent of Americans at or near retirement age have less than $250,000 in savings, according to a recent survey by Schroders, the London-based asset manager.” We found this statistic quite startling, as we believe that financial planning for the long-game is extremely important in order to achieve financial success throughout your lifetime and in retirement. 

While some may not understand the underlying purpose of financial planning, a financial plan and working with a financial professional allows individuals to take both a macro and micro view of their whole financial picture, assess both their life and monetary goals as well as qualitative and quantitative risk tolerances, and set strategies to achieve long and short- term financial success. They are also able to uncover hidden investor and behavioral underlying biases that may be impacting their financial decision making process. Another benefit that comes from creating a financial plan is organization. When creating a financial plan, you are taking inventory of everything that you have, figuring out where it all is, and where it needs to go. Just being organized can immensely improve your feeling of financial confidence and ease. 

According to a survey of 1,000 investors across the U.S. between the ages of 45 and 75 by Schroders and 8 Acre Perspective, “76 percent of Americans say they feel overwhelmed by the thought of creating one and 56 percent say life is too uncertain for a plan to have any value”. At Sherman Wealth, we believe that life is complicated, but your finances don’t have to be. We are here to simplify the financial planning process and relieve our clients of some financial stressors they may feel on the day-to-day. Given the rollercoaster the markets took us on last year, many of the “do-it-yourselfers” might be realizing that their life is becoming too hectic to also be navigating their financial picture which is why we are here to help. We believe that it is never to early nor too late to create a financial roadmap for yourself and your family, and that you never need a certain amount of investable assets to get started. 

For those of you who do not have a financial plan in place or would like to revisit your old plan that may be outdated given the current market conditions, please reach out to us and we are happy to help. Email us with questions at info@shermanwealth.com or schedule a complimentary 30-minute consultation here. 

As financial advisors, we work with individuals everyday to deliver value and financial advice. At Sherman Wealth, we specialize and focus on customized financial advice and plans. We often discuss the difference between DIY “do-it-yourselfers” and financial advisors. One very important differentiator between the two is the value of the advice.

We believe that financial advice is most successful when it’s built on a relationship. The reason we strongly believe in customized plans is because no investors are alike. Therefore, it’s prudent to work with someone you not only trust, but who will create a plan that is specific to and will reflect your goals and needs and adjust them as they change over time.

When looking for the right advisor to provide you advice, make sure they can help in these three overarching areas: investments, planning, and ongoing advice. I’d say one aspect many individuals don’t focus on is the ongoing advice component. We always tell our clients and prospects that a one-time financial plan is just a roadmap and snapshot in time. While that snapshot and roadmap will lay the foundation of your financial future, life is complicated and changes overtime. It’s important to have a trusted individual stay the course with you, jump the hurdles, and adjust your advice as your life becomes more complex.

A timely example of needing ongoing advice is this year. As we’ve been writing about, this year has been off to a very rocky start, and the markets have been digesting lots of uncertainty creating extreme volatility. With inflation at all time highs, the Federal Reserve raising interest rates, and individuals adjusting to this economic environment, ongoing advice is prudent. We’ve been working with individuals to adjust their budget to this higher cost of living, as well as revisiting cash ideas and asset allocations based on risk tolerance. If you’ve felt financially uncertain during the course of this year, this is your sign to consider an advisor who will provide you with ongoing advice. If you have any questions and are seeking either a one-time financial plan or an ongoing relationship, email us at info@shermanwealth.com or schedule a complimentary intro call here.

As we are well underway in the last quarter of the year, its a great time look at your finances as a whole, see what you have achieved thus far in the year, and re-assess your goals for year-end. We know it’s been quite a wild first half of the year in the world and in the markets, in fact, it has been the worst first half on record since 1970, along with 40-year high inflation data, the Russia-Ukraine war, the Federal Reserve hiking interest rates, and more, which makes this year’s EOY planning even more prudent. 

So, as you take a look at your finances and prepare for the holidays and 2023, let’s look at some steps you can take to reach your financial milestones. First and foremost, we’ve been focusing on tax planning and projections with many of our clients. It’s crucial to know your tax liability and prepare for the year to come in terms of your cash flow and savings. If you’d like us to analyze your tax return and help project what your 2022 tax scenario will look like, we are happy to help. Next, get organized. Organization and knowing everything you have and its location is something many individuals lack when it comes to their finances. Consider automating your finances all into one place so you have it easily accessible and at your fingertips. Make sure your beneficiaries are up to date and you have your estate planning in line. If you are interested in a demo of our financial planning software or have any related questions, please let us know. 

Once you have organized and consolidated your financial accounts, think about fulfilling your goal buckets, such as your emergency fund, 401(k), IRA, HSA, and regular brokerage account. The IRS has just announced 2023 tax income brackets as well as increased retirement savings contribution limits, so make sure you are projecting for that and also funding your 2022 contributions while you still have time! The extreme volatility year to date may be having you rethink your risk tolerance and attitude towards investing; however, it’s important to make sure that you don’t let volatility completely derail your long-term financial plan. 

One goal you might want to focus on during the last quarter of the year is funding your emergency fund and buckets for large purchases or tax payments. It’s always a good idea to have an emergency fund available to you in the event of a rainy day, so come up with a number that is comfortable to you and try to reach it. Additionally, given the current economic environment, we’ve been discussing cash management with many clients. If you have a large purchase coming up or are sitting on cash earning close to 0% at a money center bank and don’t want to put that money at risk, consider setting those funds aside in a high yield savings account or an FDIC insured CD/Treasury Bill. While these are only a few ways one can maximize their finances before the end of the year, it’s important you revisit your goals and see where you are in reaching them for the year. If you have any questions about your particular situation and are looking for a professional to help you with your end of the year planning, please schedule a complimentary 30-minute intro call here or email us at info@shermanwealth.com. 

Mental health awareness and wellbeing is so important and should be constantly discussed and talked about. With World Mental Health Day just having passed, we thought it would be timely to discuss not only the importance of mental health, but also mental health as it relates to finance. It’s obvious that finances and money can be extremely anxiety producing and stressful for many. In fact, according to a recent survey from BankRate and Psych Central, “42% of U.S adult say money is negatively impact their mental health.” So, while it’s clear that many individuals feel overwhelmed by their finances, it’s also true that there are many ways to alleviate that stress to avoid negative mental health. So let’s dive in to see what those are. 

At Sherman Wealth, we are constantly advocating for, spreading, and teaching financial literacy topics and education. Financial literacy is lacking greatly in our country and is one of the largest reasons so many individuals feel so insecure and unconfident when it comes to their personal finances, because they lack common and simple financial facts and knowledge. So, starting with the basics is extremely important. Seek out financial literacy courses or seminars, do some research, and make sure you are understanding everything you have, where it all lives, and how it works. 

Another way to feel less overwhelmed by your finances is to get organized. We always preach the importance of organization, consolidation, and automation. Make sure you are automating your finances, that they live and you can see them all in one place, and that you don’t have accounts all over the place. By not consolidating, it’s very easy to mix-up or lose old accounts you may forget about. Budgeting is a large part of financial security and financial planning. Make sure you are tracking what you spend and know how much money is coming in as well. We have also found that building and funding an emergency fund helps individuals feel more secure about their financial picture. If you are seeking financial literacy courses or would like to utilize our financial software to automate your finances, email us at info@shermanwealth.com for more information. 

Next, establishing a financial plan can help alleviate stress and maintain positive mental health. At Sherman Wealth, we build customized financial roadmaps that are unique to the needs, risk tolerance, and goals of each client. If you do not feel comfortable creating a financial plan yourself, seek help! Working with a financial advisor may lift some pressure off your shoulders as you will have an unbiased and conflict-free second opinion, accountability partner, and financial concierge in your corner as you tackle your financial life. As we approach the last quarter of the year, it’s a great time for end of the year financial planning. Keeping and maintaining positive mental health is our top priority so we are here and happy to help you in any way that we can. If you have any questions or are seeking financial assistance or reinforcement, email us at info@shermanwealth.com. 

Brad Sherman:  Today we want to discuss lifestyle creep, a big topic in the news, along balancing increasings costs, inflation, home prices, and more. We also want to talk about saving for your future and paying yourself first. Ashley, I know you wanted to talk about it being a really important balance strike, so do you want to share some thoughts and ideas that you may have about it?

Ashley Perlmutter: Yeah, well, for starters, for those of you who don’t know what lifestyle creep is, it’s pretty much when your income is rising or has rise, but your discretionary spending rises as well. So oftentimes, when you’re making more, you start to spend more, whether it’s voluntary or not. Obviously this varies per person, but sometimes life style creep makes it feel like your raise or increase in pay no longer feels like a raise, because your spending is going up as well. So a lot of times, we see individuals let their lifestyle creep get carried away. Brad, do you want to talk about some tips that you have for people who maybe let lifestyle creep take over when they get a pay raise?

Brad Sherman: Yeah, to bring it back where we started from, I think there’s two separate things here, there’s inflation that that people are concerned about. And then there’s lifestyle creep. So getting a $10,000 raise at work doesn’t necessarily mean buying a more expensive car, or going out to more dinners or taking greater vacations. I think that you should stick with your financial plan, regardless of the amount of money that you’re making. And certainly we want you to increase your lifestyle. But as you define lifestyle creep, it really is when your expenses are far exceeding your raise or increase in pay. So certainly understand the environment that we’re in where things cost more, but find a balance between saving and paying yourself first. I think that paying yourself first is really important. We always advocate to maybe increase your 401 K contribution. If you’re not already maxing that out. If you’re eligible for a Roth IRA, start contributing to that, maybe focus on your long term goals. And then we talked about this last week, but 70% of the folks out there don’t even have a financial plan, so it’s really hard to know where you’re going without a map in mind.

Ashley Perlmutter: Yeah, that statistic was really interesting and surprising. We wrote a blog last week about how important having a financial plan is, especially given the current market environment. Like Brad said, try not to increase your discretionary spending too much when you get a raise, and stick to those long term financial goals. And like we said earlier, with inflation, things are just becoming more expensive on the day to day, so keep that in mind if you decide to spend more.

Brad Sherman: Great, let’s keep all that stuff in check, like we said, if you get a 10% raise, maybe you allocate a certain percentage to going out to dinner more, something that makes you happy, whether that’s concerts, food, but don’t go too crazy to where you’re spending the raise in excess of what you can afford. So anything else you want to touch on?

Ashley Perlmutter: No, I think that is a great place to wrap up. Let us know if you have any questions about lifestyle creep. If you feel like you need to revisit your budget, I think that’s a great place to start, especially given inflationary prices and everything going on. If you’re stressed about your investments and your portfolio allocation, now’s a great time to revisit that as well. So let us know if you have any questions and if we can help in any way. Email us at info@shermanwealth.com or schedule a complimentary 30-minute intro meeting here.

Wow, what a rough and volatile week, month, and quarter its been in the U.S stock markets. In fact, the S&P 500 has seen its worst start to the year since the 1930s. We know the volatility within the markets and the Federal Reserve hiking interest rates is uneasy for all; however, as we always say at Sherman Wealth, transparency, communication, financial literacy, knowledge and confidence is extremely important.

So, thanks to our friends at Y-Charts, we will share some visuals of how the stock market has performed over the last few months and since the beginning of the year as it’s been digesting this new economic environment with the Federal Reserve hiking interest rates to combat inflation. 

U.S stocks recovered a little to start October after closing out a rough September with consumer prices rosing higher than expected showing that the Federal Reserve still has a lot of work to do to combat inflation. As you can see in the chart pictured above, September had an ugly month, setting a new 2022 closing low ending the month down about 9%.

Due to inflation remaining high, Federal reserve officials have made it clear that monetary tightening will continue despite the risk of a recession. Zooming out even further, the stock market saw its worst quarter since 2008, as show in the chart below. 

 

We will continue to monitor the direction of the US economy and stock market as the Federal Reserve continues to do its job to fight inflation. Despite this gloomy economic data, now is the time to get a hold of your finances, to make sure you are comfortable with your risk tolerance and asset allocation, and to make sure you have a sound financial plan in place. If you are extremely anxious and having trouble sleeping at night, this might be your message to revisit your finances and seek help from a financial professional. If you have any questions or concerns, let us know we’re here and happy to help! Email us at info@shermanwealth.com or schedule a complimentary introduction call here.