Broker Check

Making Better Financial Choices

| June 05, 2015

What do you do when life takes an unexpected turn? Do you have a plan or do you react? We all live life with good intentions, but when we face a rough patch we sometimes make choices that start us down the wrong path, or maybe we never learned how to be better prepared in the first place. We encourage you to watch out for the behavioral slippery slope.

Are you someone who saves for retirement, saves some amount for your children’s college, and maybe pays a little extra toward your mortgage each month? What do you do when you need a new air conditioner, a roof or car repair, or lose your job?

What about regular, everyday choices? When did you last walk through a big-box store focusing on that one item you came to buy, when suddenly – out of the corner of your eye – you spot that “special gizmo” that you don’t necessarily need, but it sure seems like a good deal you can’t pass up. How did you respond to the impulse?

It is tough to know how to balance saving vs. spending vs. SPENDING! Unless you are independently wealthy or retired, the first thing you should be doing is saving for your future financial goals. Second, you need to spend money on things that are necessary in life. But a large amount of your spending falls into the last category - discretionary spending on extras. We make choices all the time to buy things “just this once”. Maybe it’s a new grill today, but next time it might be a bigger TV or the latest smartphone.

This is how we define the behavioral slippery slope. We caution you to watch your behavior. Be aware of your spending; the items you are buying and the amounts you spend. If you haven’t, you should prioritize your financial goals to reward good behavior, such as a comfortable retirement, before making a “just this once” decision, like a new oversized grill.

We often meet new clients who have been saving, but have no idea if they are saving enough, if they are investing wisely, or if they are exposing themselves to unnecessary risks. We sit down and go over all these details and options, and we create a personalized roadmap. And because most roads have twists and turns, we anticipate a variety of the curves ahead and make the needed adjustments for life’s unexpected turns. As their trusted advisor, our clients can feel secure about their financial future.