Money Matters: Financial Well Being

  • July 5, 2018

Money Matters: July 2018

By Chuck Dudley

WHAT IS FINANCIAL WELL BEING?

That’s a real good question. And the answer is not the same for everyone, of course.

For some, it’s the basics…….food, clothing and shelter. For others, it might be lifestyle, freedom from worry and any number of things.

The Consumer Financial Protection Bureau (CFPB) believes there are four things that define financial well being universally. We’ll explore all four.

HAVING CONTROL OVER DAY-TO-DAY AND MONTH-TO-MONTH FINANCES

This should be the cornerstone for anyone’s financial success.

Consider that almost half live paycheck to paycheck.

Roughly 70% don’t have enough emergency savings.

The Economic Policy Institute stated in 2016 that median retirement savings of working families is $5,000.

The US News & World Report in October 2014 reported the average bachelor’s degree takes 21 years to pay off. Imagine what the statistics show in 2018……

Those are sobering statements. So, no wonder having control over your daily and monthly finances is a strong component.

HAVING THE CAPACITY TO ABSORB A FINANCIAL SHOCK

Of course, this goes back to the statistics stated above. If you don’t have sufficient savings, you can’t absorb financial shocks.

Where do you find the money to pay for the new HVAC unit? The car’s transmission just went out, and the car has 200,000 miles on it. Do you fix the transmission, which costs as much as the car is worth, or do you get a newer one but with a car payment?

If you want peace of mind, you must have a reserve for the things that happen to you.

Banks and insurance companies are required to have ‘loan loss reserves’ as a part of their business plan to absorb the unforeseen losses that inevitably happen. Why wouldn’t an individual want to do the same if it’s good practice for financial institutions?

BEING ON TRACK TO MEET FINANCIAL GOALS

In order to be on track to achieve your goals, shouldn’t you first have some goals?

Of course, but most people have no formal plan to target where they want to be.

Why not?

Because it takes work, commitment and action. Many want to have the end result, but don’t want to do the work to get there.

To again quote a friend’s saying…”Everyone wants help, but no one wants to change”.

How can you know if you are on track to be somewhere, if you have no idea how to get there? If you come to a fork in the road, it doesn’t matter which one you take, if you don’t know where you are going………….

HAVING THE FINANCIAL FREEDOM TO MAKE CHOICES THAT ALLOW ONE TO ENJOY LIFE

Financial freedom is a worthy goal. Freedom to live your life in retirement as you wish, not as you have to.

Financial freedom equals happiness. The absence of money worries makes for a good life for you……and……..for those around you.

WHAT CAN ONE DO?

First, examine your budget. See where you are wasting money. We all do, and a periodic evaluation brings you back to reality. Consider cutting the cord on cable…….go home for lunch……….pay the car off and drive it for 9 years……..there are lots of things to look for.

Second, begin a saving plan for the financial shocks that inevitably will come.

Third, determine where you want to be financially in 5, 10 15, 20, 30 40 years……..

Fourth, learn about Social Security so you can optimize the distributions you will receive.

Fifth, get someone to help you…………………not your cousin or your uncle who bought Walmart stock in 1976……but someone who will look out for your best interest and help you develop a plan to protect and enhance your financial well being.

Finding that helper will be the most important investment you will make. Look at it like this: most of us know we need to work out and have good intentions of starting a workout plan. We’ll stick with it for a while and then things come up and we will fade away from the workouts. Having an instructor that keeps us accountable will make us continue our workout program.

The same thing needs to happen with the search for financial well being. Find some one that will hold you accountable. Someone that has your best interests at the forefront and genuinely wants to help you.

ACTION PLAN

If you really want to learn how to focus on any of the topics mentioned today, we will listen.  We’ve been able to help families and businesses learn to use money wisely, and we’d like to help you too.   We would be honored to visit with you about how to help you and your business. My number is 501-318-0010, or you can send me an email at cdudley@argentfinancial.com.

An hour of your time spent analyzing your situation might make a lifetime of difference.

Arkansas Insurance Producer # 1005698

That’s all for this month! If you’ve enjoyed what you read, please forward Money Matters on to a friend, family member or loved one.

Sincerely,

Chuck Dudley

 

 

Contact Chuck Dudley at (501) 318-0010 or cdudley@argentfinancial.com.