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Shaping Your Financial Future3/21/2018

The month of April is synonymous with many things- spring, taxes, and April showers. But what it should also be associated with is financial empowerment. Today, a majority of consumers are experiencing some form of financial difficulty causing significant impact on their everyday lives. In fact, according to, Americans carry more than $2 trillion in consumer debt and 30 percent of consumers report having no disposable income; making it almost impossible to escape the burden of living paycheck to paycheck.

April has been declared Financial Literacy Month and is a great time to think about some of the important money lessons to be learned. Here are some activities that will help you expand your financial knowledge.

Plan a financial date night

Ok, we know what you’re thinking- this can’t possibly be a good idea. Many couples dread having “the talk” about their finances, but the truth of the matter is, it’s a serious issue. Whether you’re partnered up or on your own, pick a day when there’s nothing good on TV, have no major social events and no serious distractions. Lighten the mood by turning on your favorite music and sit down with your bills, your paycheck and anyone else who matters to your finances, and figure out where you stand.

Have fun with it by daydreaming about what your future may look like. This is also a great time to jot down your goals and think about how you can achieve them by making changes to your monthly budget.

Build a list of needs and wants

Speaking of budgets, one of the most efficient ways to build a budget is to list your expenses by category. There are three types of expenses: fixed, variable and periodic. Your fixed expenses are constant and do not fluctuate. For example: your rent or mortgage, loan payments, etc.

On the other hand, a variable expense is any cost where you can decide how much you are willing to spend on these items; for example, groceries, entertainment, personal care and utilities.

Last but not least, a periodic expense is a cost which occurs on an irregular basis. Examples of periodic expenses include quarterly insurance premiums, automobile maintenance costs and annual taxes.

You have the most control over your variable expenses, which makes it the best place to start when you’re looking to make cuts and shift your financial priorities. After you’ve assessed your variable expenses and have made the necessary adjustments, it may be time to look at your fixed expenses such as your auto and home loan, as you may be able to save money by refinancing.  Establishing a budget and knowing where your money is going is the first step to making solid plans and reshaping your own financial future. It’s also the beginning of improved financial literacy.

Take charge of retirement planning

Part of being financially secure means planning for the day where you can’t (or don’t want to) work anymore.

If you’re not already doing so, contribute to your employer’s 401(k) program. Many employers will also match your contributions up to a certain level. If you’re not contributing up to your employer’s matching portion, you’re missing out on free money!

You could also choose to contribute to an Individual Retirement Account (IRA). The last day to contribute to an IRA for the 2017 tax year is April 17, 2018. Even if you’ve already filed your taxes, you can file an amended return to in order to get credit for your contribution. More importantly, you will add to your retirement nest-egg and reap the tax advantages.

Last but not least, there’s no shame in asking for help. Retirement can be complicated, and sometimes it takes an expert to understand the intricacies. Speaking to a qualified Sandia Area Financial Advisor can take some of the guesswork out of retirement. This conversation can help you clarify what retirement looks like: what your goals are, how much you need to save to achieve them and what programs are available to help get you there.  

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