Financial Planning

How to Budget for Life Insurance

Setting yourself up for the likelihood of long-term financial success involves thinking through plans to protect your family and assets even if something were to happen to you. Life insurance is often part of the long-term planning puzzle, but can look different for individuals and their families.

If you’re evaluating your life insurance options and wondering how to fit a policy for yourself, your spouse, and/or other family members into the picture, read on to learn more about some of your options.

Evaluate Your Coverage Needs

The first place to start when planning for life insurance is by taking a look at your current needs. After all, you can’t know how much life insurance you need or which policies will fit into your plans until you know what you want to have covered.

For many, this means taking a look at likely expenses you’ll encounter in the event of your (or a loved one’s) passing. These include things like a funeral and other arrangement expenses, as well as debt repayment and income replacement needs

You’ll also want to take some time to check over your existing monthly expenditures to see how covering your premiums might play into your short- and long-term financial plans. Remember, the more coverage you opt for, the more you’ll pay on your insurance premiums. However, most families find that the peace of mind from having a robust life insurance plan in place is worth any temporary financial inconvenience.

Understand Your Coverage Options

After reviewing your coverage needs, you will want to take time to understand how your life insurance will work for you. Here are some basics to consider:

  • Choosing beneficiaries: When you establish your life insurance plan, you’ll need to choose beneficiaries to receive payout upon your passing. Typically, this includes your spouse and children.
  • Whole life and term life insurance: These are two of the more popular options for life insurance coverage. Whole life insurance covers you throughout your life and accrues cash value as you invest, while term life insurance covers you during the coverage term and may be converted to whole life insurance at the end of the policy’s term.
  • Return of premium policy: This type of life insurance policy provides the typical benefits of life insurance coverage with a payout of your invested premium payments throughout the life of your policy. Choosing a return of premium policy can play into your overall estate planning strategy and benefit for your loved ones in the long-term.

Review Your Financial Goals

Your life insurance policy coverage should play into your overall financial goal setting. When viewed as part of your financial action plan, life insurance is an important tool that can help you get closer to your desired financial future. Talk to your financial advisor about your coverage options and what level of coverage might be a good fit for your specific situation.

There are multiple variables to consider when browsing life insurance policies, from term to permanent policies and convertible options. Thankfully, you don’t need to be an expert in discerning the differences from policy to policy when you have a trusted financial advisor on your side.

If you have questions about preparing your financial plan and whether life insurance should be a part of this equation, contact Puckett & Sturgill Financial Group for a discovery consultation today! We can help you work through questions related to life insurance and related long-term financial planning needs.

How Much Life Insurance Coverage do I Need?

Finding the right fit between a life insurance policy and your lifestyle can be an important part of preparing for your financial future. But trying to sift through policies by type, coverage, and monthly expense can be a challenge.

If you’re in the market for life insurance or are looking to expand your personal coverage, ask yourself the following questions to get a better feel for the coverage may be a good fit for you.

Do I Actually Need Life Insurance?

Without looking at every factor, there is no way to definitively say whether life insurance is something you do or don’t need. But, as with most financial products, there are certain individuals for whom life insurance is more ideal.

If you have dependents and want to ensure their financial protection in the event of your passing, you may wish to consider how a life insurance policy could benefit your financial plans. Life insurance can cover the expenses associated with a funeral and other arrangements, as well as cover family debts and provide a helpful payout for your dependents.

On the other hand, if you don’t have dependents or are otherwise financially prepared to cover expenses in the event of your passing, you may not need to worry about adding life insurance coverage to your financial planning.

What do I Need to Cover?

To determine the value you need from your life insurance policy, you need to know what expenses you need to cover after your death. These may include:

  • Funeral expenses – Funeral expenses and other arrangements can easily top out in the tens of thousands of dollars. You don’t want to leave your family in the lurch with trying to cover these emotional expenses out of pocket.
  • Debt coverage – After your passing, you will want your life insurance coverage to cover your debts in full. Depending on your age and lifestyle, you may have tens to hundreds of thousands of dollars of debt to pay off. Take into account factors like your mortgage, auto loans, student loans, and credit card debt when you tally your debt coverage to achieve your minimum life insurance coverage figure.
  • Income replacement – If you are your family’s primary provider and have dependents to care for, it’s important to factor the loss of your income into your life insurance coverage figure. To achieve a ballpark figure for income replacement, multiply your yearly salary by ten years and use this number as a base for your income replacement. For example, if you make $50,000 yearly, you would want a minimum of $500,000 in life insurance coverage as income replacement.

Finally, add these figures together to discover your minimum coverage needs. For the individual with $300,000 in debt, requiring a $500,000 income replacement, and a funeral expense cushion of $20,000, the minimum life insurance coverage they’d need would be $820,000.

How Can I Determine which Plan is a Good Fit?

Finding a life insurance policy, or combination of policies, that meets your future needs and stays within your budget will likely take some careful research. Depending on your age, health, and income, you may have certain limits on the coverage for which you qualify.

Your financial advisor can help you put the pieces together to determine which life insurance policy(ies) make sense for your current lifestyle and future financial goals. To learn more about long-term financial planning, contact Jacob Sturgill for an initial consultation and personalized long-term planning roadmap.

Personal Finance Tips for Newlyweds

Planning a wedding takes months, or even years, of work to coordinate all of the details that go into making your special day perfect. But planning for your life after the wedding takes its own efforts to ensure that your new life together goes as smoothly as the main event.

When couples join their lives together in marriage, there are plenty of details to handle and paperwork to coordinate. It’s important that couples talk about the day-to-day aspects of their new life, including how to make things like shared finances work.

While each couple handles their financial union differently, there are a few basic areas where couples should consider how their status as a couple differs from their previous lives as singles. If you’re hearing wedding bells this season, consider the following personal finance tips for newlyweds:

1. Open the Financial Discussion

Discussing finances with other people isn’t always the most comfortable topic, but when you marry someone, you also marry their financial situation: present and future. You should talk about existent financial details, like income and debt, as well as your future finances, including your family budget and savings goals.

Couples who don’t communicate about their combined finances risk disagreement and challenges later on, like when one member wants to make a large expenditure while the other one would prefer to pay down debt. Reduce the risk of money-related arguments by opening the lines of communication early on in your marriage.

2. Build Your Financial Future Together

Now that you’re married and may be planning to start a family, your financial priorities are probably shifting. This is an important time to talk about plans for you and your spouse’s ongoing financial support, even if something unexpected were to occur. Look into your insurance situation and add or adjust policies, like your health insurance, life insurance and disability plans, as necessary.

You’ll also want to discuss how your future goals, like plans for retirement, can work together. While you may not have formally started your retirement planning journey, you probably have some ideas about what your future looks like. Think about lifestyle decisions and investments that you can make now to create a future you can get excited about.

3. Make Plans to Stay On Track

Talking about your finances and future goals at the outset of your marriage is an important way to start off on the right track. But if you visit the topic only once and move forward without a solid plan for your shared finances and goals, you may not end up where you expect.

This is where it’s helpful to have an objective third party who can help you talk through some of the trickier topics and plot a path for the future. A CERTIFIED FINANCIAL PLANNER TM professional is an invaluable partner for working through your financial plans at the outset of your exciting new life transition.

And your CFP® professional can continue to provide advice and guidance as you need help with your retirement planning, asset management, and future life transitions, like welcoming a new baby or buying a new home.

To learn more about how a CFP® professional can help you and your spouse start off on the right financial foot, contact Puckett & Sturgill Financial Group today to schedule a discovery meeting!

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Let Freedom Ring! Simple Steps for Working Toward Financial Freedom

When it comes to talking about managing your finances, a popular term that often gets thrown around is “financial freedom”. But what exactly does this mean?

In general, those who refer to financial freedom might be talking about things like getting out of debt, setting aside money to reach financial goals, or building a cash flow that affords them the type of lifestyle that they desire. And while these are certainly financial benchmarks worth aspiring to, trying to achieve any one of these ideals without a solid plan in place can end in frustration and failure.

So, what are some of the steps that you can take to pursue financial freedom? Consider the following:

1. Clarify Your Desired Financial State

While the concept of financial freedom might not look the same to you as it does to your co-worker, sibling, or friend, it’s important to define exactly what it is that’ll help you to feel more in control of your financial situation. Then, you want to put a plan in place to pursue that goal.

For example, if your goal is to get out of debt and set aside a nest egg for yourself and your spouse, you will want to take steps to both pay off your debts AND build sustainable savings for future use. Often, you’ll be working toward multiple financial benchmarks that, when combined, represent financial freedom for yourself or your family.

2. Evaluate Your Lifestyle

Your lifestyle factors play into your financial health in more ways that you might think. While things like your credit score and spending habits are obviously influential, other aspects of your lifestyle, like your physical health and outlook on life, can have a big impact.

Ideally, you want to take stock of how your day-to-day activities, from your morning mocha to your weekend plans, make a difference in your spending habits and savings goals. You can take simple steps to save money on a daily basis, which can give you funds to pay back debt or save with.

Other steps, like making a dramatic lifestyle change to eat better and exercise daily for a healthier future, can take time and commitment, but may impact your financial plans by limiting the amount of money you anticipate to spend on health expenses into retirement. Even seemingly unrelated lifestyle adjustments can make a huge difference to your long-term plans.

3. Look into Your Investment Options

Since savings is often a component of working toward financial freedom, it’s essential to consider your savings options for addressing short- and long-term goals. For many individuals, an investment strategy is a solid way to work toward these goals.

A benefit of early investing is that you have the opportunity to capitalize on greater returns over time. The longer you wait for investment strategies to develop, the more they can work toward your long-term savings goals. And while early investing is ideal, if you’re coming into the financial planning game a little later, it’s never too late to start taking steps in the right direction.

4. Work with a Financial Advisor

Of course, there’s plenty that you can’t predict when it comes to managing your financial goals and investment activities, which is why it’s essential to work with a financial professional who can help you to connect the dots between your desired financial state and the actions that’ll help you get there. A qualified financial advisor can equip you to evaluate what financial freedom means for your situation specifically, while taking your lifestyle factors and long-term goals into consideration.

Are you ready to work toward financial freedom for your family? Contact Jacob Sturgill today to learn more about how our personalized financial planning services can make a difference for your financial future!

Ask David: What are the Top Considerations to Make Regarding My Financial Decisions?

Sifting through your financial decisions requires attention to detail and management of more than a few moving pieces. Today, we’re talking with advisor David Hemler, MS, MPAS®, CFP® about some of the primary considerations to make when thinking through financial decisions, big and small.

Consideration 1: Risk

Are you considering doing something with some of your money? What’s the risk? Everything has a risk and usually if something sounds too good to be true, it often is.

Your financial advisor can help you navigate the potential risks associated with your financial decisions, whether you’re planning to make a large purchase in the near future or are considering your retirement savings plans.

Consideration 2: Taxes

Many folks who have gotten to know me have likely heard me say; “risk and taxes, risk and taxes…” These are two main factors of working in financial planning.

While paying taxes is a certainty, overpaying on your taxes doesn’t have to be. Financial planning and maintaining a cohesive tax strategy can prevent you from paying too much in taxes on your investments, returns, and withdrawals. Your financial advisor can be an invaluable partner in determining a tax strategy that may save you money over time.

Consideration 3: Allocation

Allocation refers to the areas where you have your wealth allocated. Most people consider their stocks, bonds, cash and real estate investments as the primary areas where their assets are concentrated. But it’s important to know where your assets are distributed and how this lines up with your risk tolerance or risk acceptance and tax strategy.

There is no one size fits all approach to allocation planning, and it’s important to talk to your financial advisor about different ways you might allocate your wealth. Age-based investing and general rules of thumb come into play here, too, so it’s a good idea to work with an advisor who has a solid understanding of your situation and goals, as well as the investment options you have before you.

Consideration 4: Diversification

In some ways, diversification is similar to allocation, but with a little more nuance. You can think of allocation as the way your assets are distributed throughout larger baskets and diversification as the components that make up those baskets.

For example, if you have stock investments, you wouldn’t want to put all of your investment into a single stock. Instead, you’d split your investments between various stocks and fund options to build a more robust portfolio.

More diversity in your financial makeup makes your finances more likely to withstand market fluctuations and varying risk levels across your asset allocations.

Consideration 5: Fees

There are fees associated with many of your investments and financial activities. Sometimes, it can seem like choosing a lower fee investment is better than a higher fee one, if the returns from each are equal.

But, as with many things in finance, things aren’t always as they appear. The best way to avoid tying your finances up in unnecessary fees is to work with an advisor who can help you to understand the various fees, including hidden fees, that your financial decisions might incur.

Consideration 6: Faith

Lastly, one of the last things to consider in making your financial decisions is your faith in the decisions that you’ve made. While emotional investing isn’t the ticket to reaching your goals, having faith in the process is an essential part of managing your wealth.

When you consider a dollar, think about how you might invest it, how long it can stay there, and how ups and downs might bring you a return or loss on that single dollar. Now, apply this principle to your financial decision making process and you’ll start to see how the faith aspect works when it comes to wealth management.

Do you have money questions? Contact Puckett & Sturgill Financial Group to learn about how we can help you make informed financial decisions with confidence. Be well and prosper!

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Are You Covered? Checking in with Your Personal Insurance Needs

When you think about planning for your future, a lot of times you may be thinking long-term toward retirement or some other big financial goal. But short-term financial planning is important too.

One way to keep your current needs in mind is to consider your lifestyle and whether your insurance status aligns with your short-term needs. Sure, you probably review your auto insurance plan at least once a year, but what of your other policies?

Take a few minutes to consult this insurance checklist and ensure that you’re on the right path for meeting your (and your family’s) insurance needs for short-term protection and confidence.

1. Have Your Coverage Needs Changed?

As you go through life transitions and even as policies update from year to year, you may find that your coverage needs have changed since you last reviewed your insurance needs. Check in with your health, life, and homeowners insurance policies to determine whether they are adequate for your current lifestyle.

Don’t forget to account for major life changes, like births, deaths, or retirement, since these can impact the coverage amounts you require. Ultimately, keeping your policies in line can save you money on your monthly payments (if you find you have too much coverage in one or more areas) or will provide a more adequate amount of coverage for you and your family members (if your lifestyle has changed significantly since your last review).

2. Are Your Beneficiaries Up-to-Date?

In addition to checking whether your coverage is up-to-date, you will want to take a moment to review your beneficiaries listed on your policies. This is especially important if you’ve recently added a new family member who might not have made it onto your insurance plan(s) yet.

You also should check whether your beneficiary information is correct. If you have adult children, make sure that their names and addresses listed correctly, since their major life events, like marriage and moves, can require a quick policy update.

3. What Policies Might be Missing?

Are you covered in all of the areas that you need to ensure your family’s security? If you’re recently married or have a growing family, perhaps now is the time to consider that life insurance policy you’ve been putting off. Or maybe it’s time to consider extending your disability coverage or natural disaster protection for your home.

Talk to your financial advisor about how to best cover your lifestyle and protect your family’s assets in the event of an unexpected illness or disaster. You may be surprised at how your coverage needs differ from the coverage you already have.

4. Do You Have Policies You No Longer Need?

On the flip side, you may be paying toward insurance coverage that you don’t really need anymore. Perhaps your life insurance policy carries far more coverage than you and your empty nesting spouse really need. Maybe your asset protection policies cover items you no longer own or use. If you’re insurance coverage exceeds your needs, talk to your financial advisor about amending policies or removing coverage to better reflect your lifestyle needs.

5. Do I Need Help Managing My Personal Coverage Needs?

It can be a big task to sift through your insurance paperwork to determine which policies you have, what your coverage amounts are, and whether these are relevant to your lifestyle and future financial goals. But the good news is that you need not work through these tasks alone.

Talk to a trusted financial professional, like Jacob Sturgill who can help you to work through your lifestyle needs and determine whether you’re on track to meet your personal and family needs. If you’d like to connect with an advisor who will take the time to get to know you personally and develop a customized financial plan, contact Puckett & Sturgill Financial Group today to schedule a consultation.

What Does the SECURE Act Mean for Annuities and Your 401(k)?

Your retirement plans require review and tweaking from time to time. Sometimes, you need to take a step back and review because of life changes on your end. Other times, outside factors, like changing retirement legislation require your attention.

If you’ve been following the news, you’ve probably heard about the SECURE Act. This is a proposed retirement reform that’s poised to be signed into law and will have an impact on some of your retirement planning activities, should it become law.

While there are a few main areas where the SECURE Act will make a difference in your retirement planning, one big component of this reform is how it’ll impact annuities and 401(k) planning. If you’re curious about how this could change your retirement portfolio or open new investment opportunities, read on to see how you may be able to anticipate the effects of this reform.

Annuities and the 401(k) Mix

Currently, many 401(k) providers don’t add annuities to their plans because annuities are considered a riskier investment and place an unwelcome amount of liability in the provider’s hands. Annuity payouts can fail to materialize, which hurts the investors relying on them as part of their retirement package. Under current laws, plan providers have the fiduciary responsibility to cover the loss of an annuity, which makes them an unpopular part of the 401(k) mix.

Under certain provisions of the SECURE Act, the responsibility for a failed annuity shifts from the retirement plan provider to the insurance company that offers the annuity. With this shift in liability, we may see more annuities pop up in different retirement packages.

What are the Prospective Benefits to Investors?

If you’re looking to add new investments to your retirement portfolio or are investing for the first time, you probably want to know: what’s in it for me?

Annuities can be an option for investors looking for a long-term plan to payout over a certain period of time. Investors who don’t have a whole lot set away in retirement accounts may enjoy the prospect of reliable monthly income, especially if they don’t have other investments that may provide a similar payout.

What are Some Potential Problems to Look For?

As an investor, you want to be aware of the investments that comprise any retirement package that you invest in. If your employer offers annuities as part of your investment options, you should be able to trust that they are worthy of your consideration. However, there is a certain risk that employers will not have the insight to provide annuity options that are particularly beneficial for you as an investor.

There’s also a likelihood that annuities as part of the 401(k) mix will incur extra fees on the investor’s end, as annuity plans tend to come with certain expenses that are often passed onto the consumer. Additionally, as part of the 401(k) mix, annuities may add more limitations to the amount of money you can draw from your retirement account or the age at which you can take these withdrawals.

Have You Reviewed Your Retirement Plan?

An essential factor in choosing your retirement portfolio mix is understanding your options and making decisions that are best suited to meeting your future financial goals. There’s never a bad time to review your existing retirement plan to monitor its performance and change your investment mix, if necessary.

If you’re new to retirement planning and want to learn more about how to invest for your long-term financial planning, contact Jacob Sturgill Financial today for a consultation!

Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.

6 Ways that the SECURE Act Might Impact Your Retirement Planning

The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) is a major federal retirement reform measure. This bill puts forth a series of revisions to previous laws governing taxes on retirement income, collection ages, and more.

While it’s not law yet, there is a lot of talk about how the SECURE Act impacts retirement planning for the average American. Investors want to know how this is going to make a difference to their portfolios, present and future. After all, there are a lot of ways in which new regulations can change existing plans for better or worse.

There are dozens of measures included in the SECURE Act, some more significant than others. Here are the ones that are most likely to make a difference to your retirement planning activities or existing portfolio.

1. Provides More Opportunities for Small Businesses to Offer Retirement Plans

Under the SECURE Act, there are more opportunities than ever for small businesses to opt into retirement planning for their employees. This bill has provisions to extend previously unreachable 401(k) sharing options for small businesses by allowing multiple small businesses to work together as a larger group and pool contributions into bigger funds. This would, in effect, give employees of small businesses retirement planning options on par with what they would see if they worked for a larger employer, provided that the owner(s) of the small business join a 401(k) pool.

Until now, small businesses have been limited in their ability to provide a variety of retirement planning options for employees, which can impact a small business’s ability to attract and retain talented employees. Options like SIMPLE IRA and SEP IRA, while adequate, don’t have the same luster as 401(k) options. As a result, many small businesses simply don’t offer retirement plans for their employees. Opening 401(k) options for small businesses can provide value for small business owners and confidence for employees at these companies.

2. Removes Age Limitations for IRA Contributions

Another impact that the SECURE Act would have is the removal of age limitations for IRA contributions. Currently, there is an age limit on IRA contribution that limits individuals over age 70.5 from contributing to IRAs. This seemingly discourages retirement savings for individuals who are approaching or past the traditional retirement age.

Removing the age limitation for IRA contributions will encourage continued IRA contribution, even into one’s 70s and beyond. Interestingly, there is already no age limit for contributions to Roth IRA accounts, so this would bring more balance for investors on the fence about IRA conversion.

3. Add Opportunities for Annuities within Retirement Plans

Provisions in the SECURE Act would provide the opportunity for 401(k) plan providers to add annuities to the 401(k) mix, further diversifying investment options for those who invest in these plans. Until now, there has been hesitation on the part of providers to add annuity options, since annuities have presented a certain level of liability when packaged as part of a 401(k) plan. However, the SECURE Act provisions remove this liability from the provider’s side, which may open more options to add annuities to the 401(k) mix.

4. Extends the Required Minimum Distribution Age

By law, you’re required to take a required minimum distribution (RMD) from certain retirement accounts by the time you reach age 70.5. Some investors don’t appreciate the constriction of this requirement, especially if they’re still working at age 70.5 or don’t plan to fully rely on their retirement savings until a later date.

Under the SECURE Act, investors will see the RMD age moved from age 70.5 to age 72. This provides a cushion for investors to add a final push of savings to their retirement accounts. Of course, if you plan on drawing from those accounts earlier than age 72, you’ll still have the option to do so.

5. Provides Penalty-Free Distribution for Certain Withdrawals

Generally, investors shy away from taking pre-retirement withdrawals from their retirement accounts because of the rate at which those withdrawals are taxed. But in some life circumstances, the future nest egg is a valuable tool that could provide some much needed relief in the short-term.

The SECURE Act, in part, seeks to answer the challenge of accessing retirement funds for certain life changes by removing the penalties associated with these withdrawals. Most notably, the SECURE Act has a provision that allows investors to take qualified withdrawals for the birth or adoption of a child. It opens up to $5,000 in penalty-free withdrawals for a qualified birth or adoption within one year of the child’s birth- or adoption-date.

6. Removes Certain Qualifications from Inherited Accounts

Inherited retirement accounts (401(k)s, IRAs, Roth IRAs) have, in the past, provided beneficiaries with the ability to withdraw funds over the course of their lifetimes. However, under provisions in the SECURE Act, these distributions would be limited to a ten year period.

While this doesn’t necessarily make a big impact for smaller inherited accounts, like 401(k)s, since they’re typically liquidated within a short period of time, it does make a difference for investors collecting so-called “stretch” benefits from inherited IRAs. In a technical sense, IRAs are not strictly retirement accounts. The rationale of the SECURE Act’s limitations is to reduce the length of time that beneficiaries can receive penalty-free inherited IRA distributions and infuse a certain amount of tax money back into the economy, by bringing back penalties for distributions taken outside of the designated decade.

So, How Might the SECURE Act Impact Your Retirement Planning

As an investor, you want the confidence that your investments are working hard for you and will one day, hopefully, help you to reach your future financial goals. With a big piece of legislation, such as the SECURE Act, on the table, there are ways in which today’s planning may not be sufficient for reaching tomorrow’s goals.

Instead of trying to work through this on your own, look to your financial advisor for information about how retirement reform might impact your bottom line. Your advisor can help you to sift through new requirements, evaluate your current accounts, and make adjustments that align you with the track you want to take.

If you have any questions about the SECURE Act or want to learn more about your retirement planning options, contact Puckett & Sturgill Financial Group today for a consultation!

Kick off Your Summer with a Mid-Year Financial Checkup

Ah, summertime! The perfect time to kick back, pour a tall glass of iced tea, and enjoy some hard-earned time with family and friends.

But before you check out for vacation, take a few moments to review your personal finances and ensure that you’re on track for success throughout the rest of the year. This short financial check-in can give you confidence that your bank account and investments are working hard for you – even while you soak up summer sunshine by the shore.

Here are some of the areas you’ll want to review during your mid-year financial checkup.

1. Your Budget

Setting a budget in January is easy. Sticking with that budget throughout the year isn’t always. Summer is a great time to check up on your budget and spending goals and see how your spending adds up.

If you know you’re going off-budget in certain areas, don’t ignore the problem and hope it corrects itself. Make the necessary adjustments now to allocate funds from one section to another or cut back on certain expenditures to stay on target.

2. Your Credit Score

When was the last time you checked your credit score? If it’s been a while, take this mid-year opportunity to inspect your score. It’s especially important to know your credit score and develop a strategy for improvement if you plan to make any large financial decisions later on in the year.

You also don’t want to let your debt repayment strategy take a break during the summer months. Continue to work down your debts and ensure that you have a bill-pay plan in place even if you will be out of your regular routine for a period of weeks or months this summer.

3. Your Tax Strategy

Just because it’s the middle of the year doesn’t mean you should be sleeping on your tax strategy. If you’re looking to achieve tax savings when you file next year, ensure that you’re taking the right steps today to see those savings later on.

Review your earnings, deductions, and special accounts and see whether there are areas where you can allocate funds more effectively. You may also wish to look into ways to offload potential tax liabilities before the end of the year.

4. Your Retirement and Estate Plans

While you’re looking into your portfolio activity, take some time to review your retirement and estate plans. Even if you’re not planning to cash in for many years yet, you want to stay up-to-date with your portfolio performance and make course corrections if necessary. Small adjustments over time will help you to stay in closer range to your long-term financial goals.

5. Your Progress Toward Financial Checkpoints

Regardless of your financial status, spending habits, or future goals, summer is a great time to check in with your financial performance as it pertains to your present and future. Take some time this summer to schedule a meeting with your financial advisor for a tailored financial checkup that’ll keep you in the know as the year goes on.

Are you inspired by your mid-year financial checkup to take a more active role in your future financial planning? Contact Jacob Sturgill to learn more about how Puckett & Sturgill’s financial planning services can help you balance your current finances with your short- and long-term goals.

Curious About Investing in the Stock Market? Consider these Factors before Jumping In

When you think of investing, your thoughts may go pretty quickly to the stock market. After all, there’s always a lot of talk about how the stock market is performing, which companies are doing spectacularly well (or spectacularly awful), and why one industry is a better choice than another. People are very interested in and have a lot of opinions about what happens in the stock market.

But what does this mean to you? If you’re curious about investing in the stock market, you probably have plenty of questions. Perhaps you’ve even heard certain soundbytes from popular voices in finance or read about stock market trends on your favorite money blogs.

Before you decide to run with the bulls and bears, it’s important to understand how the stock market works and how to find quality information about the investments that you’re interested in. This way, you can discern whether investing in the stock market makes sense when planning for your financial future.

Choose a Trusted Advisor

The most important aspect of setting yourself up for the possibility of success in navigating stock market investments – even simply to discern whether investing is right for you – is finding a trusted guide to help you along the way. This is where finding a Certified Financial Planner comes in.

A qualified CFP can help you to research your investment options and narrow choices that align with your values and goals for investing. Once your plan is implemented, your financial advisor can help you handle the details and monitor your investments to determine whether they make sense for your portfolio in the long-term.

Evaluate Your Investment Style

One of the first things you’ll do when you meet with an advisor is to sit down to discuss your financial background, ideas for how you’d like to see your financial future unfold, and different tactics that you might take to get there. Your advisor will listen and take notes to learn more about your specific situation and may ask questions to get a better feel for what type of portfolio balance may be preferable.

Your advisor may prompt you to share information about your past investment history and show interest in learning more about how risk tolerant you as an investor (or couple) might be. These factors will work to inform your advisor of your personal investment style and will ultimately help the two of you to decide whether stock market investments are worthwhile, and which ones are more likely to help you to achieve your goals.

Typically, investment style is graded on a range from conservative to aggressive. If you have a conservative investment style, you’re likely to favor less risky investments that may potentially offer lower, yet more predictable returns over the period of your investment. If you tend toward the aggressive end of the spectrum, likely you have a higher risk tolerance and will favor investments that offer the potential for high returns along with greater volatility.

Establish Your Goals for Investing

In addition to knowing your investment style, you’ll want to establish certain goals for your investing activities. Are you saving for retirement? Looking to cash in within a certain number of years and use the returns as a nest egg for some new endeavor?

Whatever your ultimate investment goals may be, you need to be clear about them when discussing your investment strategy with your financial advisor. Perhaps you’re not even certain of what you should be aiming for, but have some ideas – your advisor can help you to work to prioritize your objectives for investing.

Determine How Much to Invest

As with any other aspect of financial planning, you’ll want to set a budget for your investing strategy. This is, again, something that your financial planner will work with you to establish, but some basics for determining an investment budget include setting a goal for how much money you hope to accumulate or how much income you want to draw from your investment later.

Additionally, you and your advisor will work to find investments that have the potential to help you start working toward some of those short-term and long-term financial goals. There are a variety of investment vehicles from which to choose, with some requiring a certain investment minimum, so it’s important to establish a budget to give your advisor an idea of which investments are both helpful for pursuing your goals and stay within a reasonable dollar amount for your specific situation.

Diversify Your Portfolio

Even when you’re ready to take the plunge and invest, you want to ensure that you don’t put all of your eggs into the proverbial basket. Diversifying your portfolio allows you to take advantage of the potential returns offered by multiple companies, industries, or investment vehicles while also being able to compensate for a loss or two along the way.

Diversification is helpful because it allows you to spread your investment dollars between investments to avoid a total loss from one failure. Your financial advisor should steer you in the direction of portfolio diversification while also keeping your budget, investment style, and goals in mind. Finding this delicate balance is part of where the experienced advisor will prove to be an invaluable guide as you work through your investment strategy and onto your financial future.

Monitor Your Investments

Once you’ve taken the steps to invest in the stock market, you don’t want to simply drop your money and wait for a future payout. You’ll want to stay up-to-date with your portfolio’s performance and make adjustments as necessary.

Now, it can be challenging for the average investor to view their portfolio objectively – after all, it’s your money on the line. Market fluctuations, as normal as they may be, take on a whole new meaning when it’s your potential returns rising and falling.

Emotional investing behavior is very common and can cause you to make split-second decisions that have large ramifications. This is another area where you can partner with your financial advisor – after all, their job is to view your investments in a professional manner and help you to decide whether to make adjustments or stay the course.

Your financial advisor should help you build a strategy and investment portfolio that fits your specific situation and gives you confidence. That way, you can enjoy your day-to-day life without waiting for financial news in your inbox every morning and stressing all day about which factors may influence your bottom line.

Do you have questions about your financial future? Do you have a portfolio you feel needs some attention? At Puckett & Sturgill Financial Group, we are a group of CFPs who are experienced in helping clients to navigate the ups and downs of portfolio planning and management.

Contact us today to learn more about our investment services and to schedule a discovery meeting with a CFP to start your investing journey!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.

Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.