In recent weeks we have heard a lot of talk about what is considered “essential” during this pandemic. Many of us have been taking personal inventory on what we personally value as “essential.” So, what is essential to you?
When people are asked what they deem important, financial stability typically joins health and family well-being at the top of the list. Yet, a much smaller percentage actually follow through by creating a solid financial plan.
COVID-19 has brought along significant changes to our careers and our personal lives. Many of us find ourselves with more time on our hands as we work from home, have limited entertainment options, and experience fewer demands on our schedule – which provides a significant opportunity to focus on those goals that always seem to get pushed to the back burner. If finances have been on your mind, now is as good a time as any to plan for your financial future.
With recent news highlighting the market volatility, you may be wondering, “Is now really a good time to invest?” The answer is this: there will never be a perfect time to start investing. Many statistics show that starting early is the most important factor. That time in the market is more significant than timing the market.
So, how can you get started?
- Think about what you’re saving for.
Is retirement your top priority? Have a special trip in mind? Perhaps there’s debt to pay off. Or maybe you’re planning for a wedding, a house, a child, or a college education. Whatever your goals, a thoughtful plan is the soundest way to get there.
- Develop a budget.
Take statements from bank accounts and credit cards for an ordinary month in terms of spending (removing any atypical items). Add up the totals to establish your monthly expenses. Take your income for that same month and deduct the expenses. The amount remaining is your surplus. If your surplus is a negative number, go back and see if there are expenses you can deduct to make it positive.
- Determine where your surplus should go.
Once you calculate your surplus, you can begin to designate it to your goals. Then you can consider where these funds should go – stocks, bonds, 401k, an IRA, savings, a 529 plan, etc. This is where engaging a wealth professional can be especially helpful. At Bartlett, our wealth professionals work side-by-side with couples, familes and individuals to help them determine how to save for competing goals along with the best ways to invest and save to continue working toward them.
We know that saving money overall has a greater effect on total wealth versus returns in general. And the longer you have to save and invest, the more time you have to recoup any losses. After considering all of our options on the table, we can commit to achieving our financial goals. You may never have more time than you do now to focus on this critical endeavor.