REPOST: Creating a financial plan? Start by asking a question

This article from Forbes lists questions you need to ask yourself when creating your own financial plan so that you can determine your needs and properly execute your ideas.

Although many think the economic recession inspired Americans to become better savers, a 2013 study from Northwestern Mutual on Financial Planning Obstacles shows the reverse is true. Some 6 in 10 Americans say their financial planning needs improvement, the study reports.
While many Americans were forced to cut back during the recession, they don’t necessarily know how to move forward. Many people now find themselves in different income brackets, while others may have used up emergency funds or robbed their retirement accounts to offset financial setbacks.
Those who responded to the study said their biggest barriers to planning for the future are a sense that they just don’t know where to turn or how to begin, or that they feel stymied because they don’t think they have enough time to deal with long-term goals.

Image Source: www.forbes.com

Ask Where You Want to Be

Perhaps the most important question for people to ask is where they want to end up—not what they have to give up. Budgets can empower people to achieve what they want in life, both now and when they retire, says personal financial columnist Liz Weston, author of several books, including There Are No Dumb Questions About Money: Answers and Advice to Help You Make the Most of Your Finances.

“Most people view budgets like a diet,” Weston said. Instead of thinking about what they need to give up, they should ask where their money is going and if they’d rather have it go somewhere else, she advises.

A budget is simply a process of choices, Weston added. “What you’re hoping to do is spend less on the stuff you don’t care about and spend more on the things that you do.”

Look Forward

One of the best ways to get back on track is to look forward instead of back, when incomes might have been higher, said Weston. “One of the most common things I see is people thinking they should be able to have a better lifestyle than they do on the income that they have.”

That belief can lead to overspending, denial, and problems saving money. Part of the solution is a reality check. “You’ve got to do the math for where you are today,” she said. “At some point you’ve got to say, ‘The past is past.’”

Do Some Research

Everyone has questions about money. “No one is born knowing this stuff,” Weston said, adding that even those educated about financial planning by their parents are now dealing with outdated information.

Many of the money rules followed by past generations no longer match today’s financial realities, she said. For example, the old wisdom of stretching to buy a house blew up on many people when the housing bubble burst.

“Obviously the rules that people were operating by during the boom years didn’t work,” Weston added. “People have to be more critical thinkers than they have been in the past.”

That’s why people have to ask plenty of questions along the way, Weston said. “It’s important to take the bull by the horns and realize you have to educate yourself,” she said. To find answers, don’t be afraid to do the research and consult books, trusted websites, or financial advisors, she added.

Know Whom to Trust

Twenty years ago it was difficult for middle-income people to find financial advice. Today, people can feel overloaded with information—most of it contradictory. Don’t assume that because someone has a blog or TV show that they know what they’re talking about, Weston cautioned. Instead, make sure the source has a background in comprehensive financial planning.

If you’re interested in hiring a financial advisor, know your goals and make a short list of recommendations from friends, family, and other trusted sources. Set up face-to interviews with your candidates—to be sure you’re on the same page.

“There are more resources for middle-income people now, including different types of financial advisors to help with different budgets and needs,” Weston said. Options range from comprehensive financial planners, who can offer advice on a wide range of subjects, to fee-only financial planners who charge by the hour. Even die-hard do-it-yourselfers, however, should consider consulting some type of professional planner when they get within 10 years of retirement to make sure they’re on the right track, she added.

Take a First Step

When getting started, keep things simple. “If you can’t explain it to a 10-year-old, you probably shouldn’t be investing in it or doing it,” she says.

For retirement planning, start with a 401k (up to what the employer will match) and an IRA.

Those who don’t put money into a retirement plan can miss the employer match, the tax break for contributing, and a chance to have their returns start earning returns. “Every $1,000 people fail to put into a 401k is at least $10,000 in lost retirement income,” Weston says.

Weston’s most important tip: Don’t give up. “If this isn’t natural, if it doesn’t make sense, hang in there,” she said.

Learning about money is a lot like learning a new language, Weston said. When people first start talking about money,the words may be confusing, she said. “Then gradually you start being able to translate them to yourself, and you figure it out.”

Hi, I’m Dana Ray Reynolds. As a financial planner, I offer my services to private businesses and individuals to help them make informed decisions and achieve financial security. Follow me on Facebook for more helpful tips in financial planning.

REPOST: Financial planning for families of children with autism

For families of children with autism, financial planning may be the least of their concerns especially when faced with day-to-day struggles. However, making financial arrangements can benefit families, explains Jennifer Cerbasi in the FoxNews report below.

Image source: foxnews.com

The list of priorities for families of children with autism is long: Doctors' appointments, speech therapy sessions, social skills groups, and Individualized Education Program (IEP) meetings are just a few of the items on the agenda.

Families are often focused on the here and now – what's best for their child's development today. The future is filled with unknowns and these day-to-day struggles often overshadow long-term plans, which may be difficult to think about.

The considerations are many, including basic logistics, such as housing, living expenses, and income, in addition to therapies, social groups, and activities or programs that may improve an individual's overall quality of life.

"As parents, we fight for the best IEP for our child, which leads to the best quality of life. Financial planning serves the same purpose," said Clark Crawford, vice president of sales and new business at Volios Group in New Jersey, and father of a child with an autism spectrum disorder.

For Crawford, the essentials when it comes to planning include a will, which dictates proper guardianship of the surviving children; a special-needs trust, which may fund both the necessities and any extra services; and insurance plans to provide for the family in case of a crisis. A sound plan needs to take unexpected deaths into account, he added.

"We talk about financial and insurance planning for the long term. What about a 6-year-old with autism who is left without parents?"

A family’s current financial situation and dynamics are important factors to consider when planning, but a crucial factor is the independence level of the child with autism. Some children with autism spectrum disorders’ (ASD) academic skills that are at or above their grade level, but exhibit deficits in other areas, including social, emotional, and problem solving skills.

"With just an insurance plan, a check may be issued to a child who is not prepared to manage it," said Crawford.

Bruce Maier, Financial Consultant for AXA Advisors, said when he initially sits with a family, he presents the idea that they are planning for two generations.

"Every family and situation is different. Every child with autism is different. The personalization of the plan is so important,” Maier said. “We talk about 'What keeps you up at night?' Granted, everything will keep you up at night when you have a child with special needs, but that question helps us focus on the priorities."

According to Maier, families of children with special needs are used to working with a team of professionals and should consider a financial planner another member of the team. On the other hand, he understands why people put off meeting with a financial planner or an insurance agent, and in turn, discussing guardianship.

"Parents may not be ready to have that conversation," but, he added, by planning and putting some of the pieces in place, "You can approach the potential guardian and say 'I know this is a difficult thing to assume, but I've made some financial arrangements that may make the situation more comfortable.’"

Though financial planners and insurance agents know their products well, it's the parent of the child with ASD who truly knows the ins and outs of daily life. To that end, Maier suggests that in addition to any legal documents and plans families may put in place, parents write a letter of intent, documenting all the details of caring for their child with special needs, including medications, daily schedules, and favorite toys, movies, or activities.

"For example, if every time Johnny goes to the pediatrician, he gets a red lollipop -- and it has to be red -- that can really make or break a situation," said Maier.

Knowing that many children with autism follow specific schedules or have very unique preferences, a letter of intent, though not a legal document, may ensure vital information is passed on to those now caring for the child.

Douglas O. Baker of Los Angeles, California, is a Special Needs Advisor and, like Crawford, is a father of a child with ASD. Baker said parents should to work with someone they trust, as he has come across his share of professionals who don't necessarily have the child's best interest in mind, or don't listen to the family’s needs.

"Parents have to be wary of agents poaching special needs families, simply trying to sell a product,” said Baker. “Families drop their policy after a year because it didn't make any sense."

Baker said he focuses on helping families create a positive quality of life both parents and their children can enjoy now, as well as planning for the future. In addition to financial planning, he assists families in navigating school and service systems, and likens himself to an air traffic controller or a quarterback, acting as a resource because he knows how overwhelming the decision-making process can be for a family.

"There are a lot of moving parts when it comes to having a child with autism,” said Baker. “You think birth to 21 years old is the hardest part; the longest stretch in your life with a special needs child is adulthood."

All three professionals highlight the importance of creating a plan that attends to the needs of the caregiver, whether it be the parents who are still living, or a guardian who steps in upon their passing.

"Parents are so used to focusing on the child with special needs, but if you do not think about yourself and your goals in the sense of risk protection among your assets, disability insurance, and your ability to maintain income, it becomes a catastrophic situation for a family of children without special needs,” said Maier. “It becomes an almost impossible situation for a family of a child with special needs."

With all of the components of raising and caring for a child with ASD, the financial aspect is one of the most daunting and overwhelming for families already inundated with decisions to be made. By meeting with a professional and evaluating the family's current and future state of affairs, parents of children special needs children may be able to take one thing off their very full plates.

I am Dana Ray Reynolds, a financial planner with more than 10 years of experience in the fields of risk management and tax planning. For more discussions on the various aspects of financial planning, like my Facebook page.

Five things you don’t know about financial planners

Despite the prestige that my profession brings, I still get questions like “Dana Ray Reynolds, what exactly do financial planners do?” Honestly, I am perplexed when I get that kind of inquiry. Financial planning is a booming career, and financial planners are everywhere. How can people not know what we do?

Image Source: forbes.com

But if you’re one those people who don’t really have an idea about the work that financial planners do, don’t fret. I can compose myself and tell you the basics:  

1. We specialize. Some of us can recommend a limited range of investments, while others can assess all aspects of your finances. Some excel in real estate planning, while others work best in debt management.  

2. We charge differently. We can ask for a fixed payment for developing your financial plan, or we can ask commissions from your products that we help sell.  

Image Source: foxbusinessnews.com

3. We come from different backgrounds. Our profession does not require a specific college degree. Most of us, however, have a degree in accounting or business administration—two fields that essentially deal with finances.  

4. Most of us have CFP credentials. We are labeled as Certified Financial Planners only after meeting the requirements set by the Certified Financial Planner Board of Standards. The certification is proof of our expertise.  

Image Source: cfp.net

5. The best among us are fiduciaries. The Fiduciary Oath is our vow to work in the best interest of our clients, even if this wouldn’t be profitable for us. Planners who only care about investments and do not assess their clients’ overall situation may not be considered as fiduciaries.

These are just some of the basic things about financial planners. The role that we play in managing your money, especially in times of crisis, could become way more complicated depending on a client’s financial situation.  


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