When was the last time you took a hard look at your finances? Even if you’re hesitant about facing your bank accounts, doing so can be the first step to put you on the path to financial freedom. Since you work hard for your money, here are seven ways to help your money work for you and set you up for financial success.
1. Become friends with your financial professional
The first step on the path toward financial success is to find a reputable financial professional, someone you get along with and can build trust with. This person should ask you questions about your goals to get an understanding of where you’re at financially, and where you want to go. It’s OK to feel anxious and not be familiar with every aspect of your finances. Education is key, and your financial professional will help break everything down so you learn the ins-and-outs of your expenses, your investments and, ultimately, how you want to plan for the future.
2. Get comfortable with being uncomfortable
It’s important to get familiar with your budget, bills and bank sooner rather than later. If you are in a relationship, it’s a good idea for both you and your partner to understand your finances in case something happens to one of you. Your banker can help you go over your accounts and help you gain some insight into your spending habits and savings basics.
3. Get it in writing
Make sure you are dotting your Is and crossing your Ts by getting every important financial statement or decision in writing from the appropriate party. From estate planning to trusts, it’s important to have everything mapped out. This can help lessen stress down the road because everything will already be in place. Another aspect to consider is the communication of legal considerations – like wills, power of attorney, etc. – with your spouse and family to make sure everyone is on the same page.
4. Look into ESG investing
ESG investing means you are evaluating a company’s blend of environmental, social and/or corporate governance factors to determine if you’d like to invest in it. For instance, if solar power is important to you, you could invest in companies that are in this industry. Or if data security is a priority, you could invest in companies that share similar socially responsible values. While this isn’t a new idea, there has been a dramatic increase in people wanting to make a difference and invest accordingly. You can talk with a financial professional anytime on how to align your investments with your values.
5. Consider the fiduciary standard
It’s important to work with a trusted financial partner who can facilitate sometimes tough conversations and who you know has your best interests at heart. If your bank or financial planner acts as a fiduciary, that means that they have to act in your best interest and look out for what matters to you, not what matters to the bank or themselves.
6. Know if you are in the ‘sandwich generation’
We consider the sandwich generation to be people who typically have debt of their own, and are balancing the financial demands of both their children and their aging parents. Women in the sandwich generation tend to take on the brunt of the responsibility, both financially and in household management. Having an open dialogue about what’s going on with your banker can help you effectively manage this situation. A banker can help establish a timeline to help you prioritize your money and find solutions to improve your financial health.
7. Prepare for retirement early
A critical aspect of financial wellness is preparing your legacy early, from retirement savings to other details like life insurance. Having a plan can give you peace of mind and can help protect your family’s future if something were to happen to you. If you have the option of a 401(k), check to see if your employer offers a matching program, which can be considered “free money.” A banker can help you understand where and how to invest your 401(k) to get the most out of your contributions. It’s never too late to start investing and taking charge of your finances.
You need to earn, grow and plan for the life you want, and beyond. Stay in the know with UMB and learn more about how we support Woman and Wealth.
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