In a recent study by BlackRock, money is the highest source of stress for people, with 55% of people citing money as their biggest stressor. Work was the second highest.
To avoid a scary future, focus on what you can control in your work and money life. Business cycles of boom and bust will occur — potentially affecting your earnings power — while financial markets will go up and down. You can’t control this.
But you can focus on your career, savings, spending and protecting yourself and your family.
Know Your “Why” — Take time to understand what’s truly important to you and create the life you want. Prioritize your goals and aspirations. It is easy to get caught up in the trap of defining success as “having the most money.” We find the clients who are happiest are those living their values and prioritizing the things that matter most to them.
Career — Seek to find balance between earning money for your objectives versus truly doing work that is meaningful to you. An April 2019 survey by CNBC showed that “Meaningfulness” is a key component of happiness at work. Find work that matters to you.
Savings — It’s much easier to set aside money when we know why we are saving and are in tune with our priorities. It’s easier to pass on buying that new car when you know that building your savings is getting you closer to your priorities.
Spending — Live within your means. Understand what you earn after taxes and savings toward your goals, then build a spending plan for what remains.
Investing — We often think this is all about financial assets. Having an investment strategy that supports your overall plan is important. However just as important is investing in yourself — your health, wellness and your work skills. If you don’t have your health, no amount of money will help you avoid a fright. Given the pace of technological change it’s also critical to continue to build your work skills.
Protecting — It’s important that we plan for the unexpected as well. Even though these are scary topics, its critical that you manage your risks in various areas:
▪ Get quality insurance for your health, dental and vision needs. Health care costs continue to skyrocket, and you never know when a significant medical issue might arise. Without proper coverage, an issue could crater your overall financial net worth.
▪ Disability insurance is often an overlooked component of insurance. It’s more likely that one will become disabled than die. Make sure you have adequate coverage for you and your family should you no longer be able to work.
▪ Also assess life insurance, for both the breadwinner(s) and a spouse that stays at home. If your company provides life insurance coverage, don’t assume it’s enough for your needs.
Wellness — Take the time to invest in yourself by getting enough sleep, eating nutritiously (avoid that Halloween candy!) and exercising. We may not be able to control our inherited genes, but we can manage these important aspects of our lives so that we feel better, physically and mentally.
Wealth — Have appropriate insurance for your “Stuff” – home, auto and other tangible assets. Have insurance that covers you in case others get hurt either on your property or if you are operating a vehicle.
Every person’s situation is unique and the above isn’t likely to be a comprehensive list but rather a starting point for some key components. Work with a Certified Financial Planner who can help you assess your specific situation and build a plan that helps keep the scary stuff at bay.
Joni Lindquist is a Certified Financial Planner professional, a former corporate executive and a Principal and Financial Planner and Executive Coach at Aspyre Wealth Partners. She helps people Master What’s Next, no matter what phase of life.