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Preparing for New Adventures and Life's Changes: how a financial planner can help

Tron D. Welch, CFP®, MBA, AIF®

We all know that the only thing we can take for granted is that life can change.  These changes can be positive and inspiring or they can be unsettling for a time.  Regardless of the type of shift there is almost always an impact on our finances.  Over the years, I’ve seen clients get married, divorce, have kids, send kids off to college, become expats, start a business, purchase vacation homes, inherit money, downsize or take an extended leave from work.  With each shift, it is important to evaluate your overall financial strategy to ensure that your tax and investment strategies support your current lifestyle as well as your financial goals.

It is critical to use times of stability to create a stronger financial picture for you and your family.  These times of growth, when property values are increasing, the markets are on an upswing and your career is at full force, are great times to build a stronger financial base.  This is the time to:

Build your emergency fund:  If you’re under 40, it is likely that you will have two to three periods of economic difficulty before you retire.  I recommend that clients under 40 stock away about 3 to 6 months of salary into a liquid account.  As we age, that number increases to accommodate the likelihood of a prolonged job search or a decrease in salary.

Pursue a dream:  If you have always wanted to purchase a vacation home, start a business or take time off to travel, it is important to create a solid strategy to fund your new adventure.  Talking with a financial advisor can help evaluate expenses, income flow options and the overall effect of your new lifestyle on your larger financial picture.

Evaluate your insurance needs:  The current trend of piecing together insurance through the least expensive options may seem to save money initially, but I would argue that it is wise to have a professional evaluate your insurance needs annually.  The reason is that as property values, your income and your assets shift, so do your insurance needs.  Considering your needs around umbrella policies, disability insurance, life insurance and property insurance can protect your financial future.

Some of my favorite scenarios to work with have been helping clients adjust to and plan for those times when life changes and there are new options on the horizon.    It’s always a pleasure to be part of the planning process, but these major steps are particularly engaging and, to me, express the importance and value of having a financial advisor.  I encourage all to attend on of our upcoming seminars covering topics from college planning to wealth building and retirement.  Please check for dates and times for upcoming educational opportunities.