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Financial Symmetry: Balancing Today with Retirement

When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, Chad Smith and Mike Eklund unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only financial advisors who answer questions about tax savings, investment decisions, and how to save more. If you’ve been putting off your financial to-do list or are just not sure what you’ve been missing, subscribe to the show and learn more at www.financialsymmetry.com. Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for over 20 years.
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Now displaying: Page 1
Aug 26, 2019

How do you make financial decisions? Are you intentional with your money?

Short Youtube recap here: https://youtu.be/9g3s36KPm9E

Most people have trouble articulating their framework for making financial decisions. It begins with finding a healthy balance between spending and saving. After these short-term decisions, examining your longer-term goals will have more meaning. So in this episode, we asked Cameron Hendricks to join us to help you understand how to create an intentional framework to make the right financial decisions for you and your family. 

There are only 5 ways to use your money in the short-term

When planning to use your money, you need to consider what your options are and whether you are facing short-term or long-term decisions. Many people will be surprised to discover that there are only 5 ways to use your money in the short-term. 

  1. Lifestyle
  2. Give it away
  3. Pay taxes 
  4. Pay debt
  5. Save

Each one of these short-term ways to use money impacts the other. Think about your spending as a pie chart. If your lifestyle expenses increase then one of the other options has to decrease. If you increase your savings then another option has to give. 

You can start your planning by considering your long-term goals

Making intentional decisions means your short-term decisions should be driven by your long-term goals. It’s a good idea to start with long-term planning and work your way back to your short-term goals. There are 6 items to think of working towards from a long-term perspective. 

  1. Financial independence - are you looking to retire or leave your job with its security?
  2. Charitable giving - this is more than just short-term charitable giving. You will need to have a process to achieve a higher goal.
  3. Freedom from debt - how much do you pay toward your debt? Pay down your miscellaneous debt first before tackling the mortgage.
  4. Lifestyle desires - this could include a second home or a boat
  5. Family needs - Many people want to save for their children’s college but also feel the need to help their elder parents.
  6. Starting a business - This takes planning and capital.

Find ways to simplify your financial decisions

Many people think that financial planning has to be complicated. But actually the more simple you can make your planning the better. Complexity gives a comforting impression of control while simplicity is hard to distinguish from cluelessness. You may seem like you are missing out on things when you plan simply, but it’s really about understanding the flow of money. Understand how your cash flow looks now and how it will impact the long-term financial decisions. You know there will be trouble ahead if you haven’t planned for the long-term. 

Create a financial framework to plan your financial decisions

Financial decisions can seem daunting but if you have an intentional decision framework to help you walk through your financial choices then your choices will be more clear. We all have the temptation to spend, especially if we get a lump-sum payment or a bonus from work. But we need to find a way to balance our short-term satisfaction with delayed gratification. When you layout your long-term financial plans you can then start planning how to spend your money in the short-term. 

Outline of This Episode

  • [2:27] What are your options?
  • [5:44] Find ways to automate
  • [10:40] There are 6 items to think of from a long-term perspective
  • [14:35] What should you do with a large one-time increase in income?

Resources & People Mentioned

Connect with Cameron Hendricks

Connect With Chad and Mike

Subscribe To This Podcast

Apple Podcasts <> Stitcher <> Google Play

 

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