275 Hess BoulevardDirections
Lancaster, PA 17601
- contact us
Our Executive Vice President Adrian Young was recently interviewed on Family Life Network as a special feature. His conversation offered practical tips and techniques for managing your personal and household finances for the new year ahead. With suggestions to set your goals, track your progress, and celebrate the “desserts” you develop, host Traci Lynn also asks how you can “kick-start” your money goals.Click Here to Listen to the Interview
Special Feature – Financial Goals
January 2, 2023
Thank you for plugging in to this family life news podcast. Streaming issues-driven family focused news.
With inflation at a 40 year high, many people are aiming to do what they can to make 2023 a good year when it comes to finances. Our guest today is Adrian Young, Executive VP with Ambassador Advisors. Adrian, what do you think is the most important first step?
I think when you’re talking about any good plan the first thing that needs to be done is establishing goals and objectives. What do you want to accomplish in 2023? Or maybe what’s keeping you up at night? You want to have a pen and paper you want to write it down whether it’s a whiteboard or whatever you do writing down those goals and objectives is probably the most important first step someone can take.
A recent WalletHub study shows one in three Americans are planning to make finance related New Year’s resolutions. What other winning steps can we take when it comes to personal finances?
One of the first things we need to remember is that we don’t own anything. We’re here simply stewarding these assets. We want to give the Lord the first fruits. We want to track progress as we go with those goals and objectives, but some of the other things we can do is if you do have debt you want to pay off that debt starting in concentrating your firepower on the highest interest rate debt that you have first. Another thing that you can do is you can maximize tax advantage savings whether it’s Roth IRA’s, 401K plans, any of those vehicles allow you to ensure that you’re getting tax deferral along the way and the ability to draw things out at a later date when you hopefully will have more money because of the tax deferral you had along the way.
Do you have any ideas for tracking our actual spending as we get into the whole budgeting aspect?
Yeah, budgeting has come such a long way and there are a lot of really great apps that are out there. Now we have many people that will use the envelope methodology. They’ll have an envelope that is for their giving, for their living, for their owing and for their growing, and that’s a great way to do it on every month you’ve got that envelope and you’ve got a certain amount dedicated to each one of them, but in today’s day and age you have apps like Mint and Honeydue, Personal Capital, Monarch, depending on if you want to be a bells and whistles person, if you’re driven by spreadsheets or if you want to have little exciting memes come up when you accomplish a goal that you may have you can choose those different ones in order to accomplish that.
Any advice, I know some people are a little leery about linking some of those apps to bank accounts?
Yeah, it’s a great point. Now, most of these places have got multi-factor authentication to make sure that those pieces are taken care of; however, most of them also allow you to enter the information if you do not want to actually link it itself.
Great! How about automation? How does that help us keep on track financially when it comes to savings?
Yeah, this is really great. Automation is in so many different facets of our life and have brought things to progress. When you have things set up to come directly out of payroll and we have a lot of people that will do things out of their bank account, but if you can take the step of talking to your Human Resource person and have things for savings whether they are tax preferred savings or just other savings taken directly out of your payroll that automation puts you in a position where you don’t see the money. And if you don’t see the money and it’s not burning you know, the proverbial hole in your pocket there’s a high likelihood that you’re not going to spend it and it’s going to help you keep to those goals that you made at the beginning of the year.
Absolutely. And it’s really great when you don’t feel like you’re very disciplined on a regular basis so the automation is doing it for us.
Ah, some people think of budgeting with the same excitement as eating their vegetables yet you mentioned earlier it can be exciting and customized, right? Anything else you want to share about budgeting?
As you said, this steaming bowl of boiled brussel sprouts is staring you in the face for budgeting and it’s rarely pleasant, but a budget is an act of discipline. Now it can be looked at as an act of spiritual discipline as of course we know too, but I think the best thing to really looking at how we build excitement with this is look at some of those apps that I mentioned. There are those tools that can give you if you do need to have that tactile or visual stimulation to encourage you along the way, but even if you don’t I think one of the best things you can visualize is behind that steaming bowl is the dessert of your choice and that’s really what you’re doing when you set these goals and objectives in the beginning, and you write them down, and you track your progress. You’re doing one scoop at a time through those vegetables, but you’re getting to that homemade pie on the other side of those vegetables and I think that’s really the motivation that a lot of us need.
Excellent visual. I really appreciate that. I’ve noticed also some people are thinking it’s pretty popular to do almost like a financial journal maybe if they’re not going to the apps. I’ve seen some with stickers and everything.
A different form of bells and whistles.
I think again it’s accountability. We journal oftentimes you know, after you’ve read scripture, you’ll have the opportunity to journal. I think the same thing with your financial walk is journaling will help you see that progress. You go back at the end of the year and you see some of the mistakes perhaps you made, you see some of the decisions that you had, you see how the road has been paved in front of you and how you walked it, so I think journaling is a great idea in both of those aspects.
Adrian, speaking of accountability, do you think that we also should have an accountability partner when it comes to our finances?
I think accountability partners when it comes to finances are excellent. Now for many it’s a spouse, for many and many of our clients its us as advisors. We end up being that accountability partner where we’ll sit down and we’ll say tell us about what you want to accomplish this year and how we’re going to go about doing it and how we can help. And then throughout the course of the year we’ll hear periodically how were accomplishing those goals and the steps that we’re taking, but I think a financial accountability partner is an excellent idea and it’s got to be someone obviously that you trust, someone that you’re comfortable with, but it could be anyone from any walk of life so long as they check those boxes you know, they are equally yoked, you trust the person, you feel like they’ve got a head on their shoulders and they are someone you feel like you can talk to openly.
Yeah, and hopefully they’re better at finances than you are.
Even if they’re just as good, they are in a situation where they can be an accountability partner.
One last question for you Adrian. What about emergency savings? I know some people have different metrics on this, but for getting started if you don’t have an emergency savings right now, what’s a good way to start, or what’s a good goal to aim for?
There are so many different metrics. We typically say three to six months of expenses is where you’d want to be. Bear in mind that you don’t have to put this in a traditional savings account you just need to have access. It needs to be accessible; it needs to be liquid in nature so with interest rates where they are right now, you know treasury bills, one year CD’s, you have things that are yielding over 4-1/2% currently that you can use as that emergency fund and if everything goes according to plan and you don’t have that emergency then that can roll over into longer term savings. So, you start with the short, three to six months is where you want to get to understanding that we got to pay down the debt loads that we have kind of at the same time, but a lot of that then can pivot into mid-term savings, pivot into long-term savings as well.
Great! Is there anything else you want to share with our listeners about getting started right in this new year when it comes to finances?
Think about where we are right now in the economy in understanding that when you’re saving and you’re starting first thing you have to do of course is again map out those goals and objectives, but then you have to take that step. And when you take that leap of faith, when you take that first step it sets you on a path and if you can stay focused on those goals and objectives it’s going to take you a long way. One of the ways that you can accomplish those goals and objectives is to make sure that again, taking advantage of the tax code with the savings that you do, do. Focus on paying down high interest debt, but also diversifying what you have. You don’t ever want to put all your eggs in one basket whether you’re working with a professional or not making sure you’re looking at different types of investments that have the opportunity to whether the storms of different economic environments going forward.
Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposes of avoiding penalties that may be imposed by law. Each tax payer should seek tax, legal or accounting advice from a tax professional based on his/her individual circumstances.
This material is for informational purposes only. Neither APFS nor its Representatives provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions. Information has been obtained from sources believed to be reliable and are subject to change without notification. The information presented is provided for informational purposes only and not to be construed as a recommendation or solicitation. Investors must make their own determination as to the appropriateness of an investment or strategy based on their specific investment objectives, financial status and risk tolerance. Past performance is not an indication of future results. Investments involve risk and the possible loss of principal.