Stressed Out About Money? How to Secure Your Family’s Financial Plan
Today’s volatile markets can drive investors in the Lakewood, Colorado area to distraction. Earlier this year, the stock market was at all-time highs before crashing over 30% on news of the coronavirus. While equities have shown resiliency and rallied back to recover a significant portion of its losses, market volatility remains. These types of fluctuations can create acute financial anxiety. At The Normandy Group, located in Lakewood, CO we understand how finances and market volatility can lead to possible stress and uneasiness. To potentially reduce this uneasiness, diversification and a disciplined investment strategy may be beneficial in decreasing portfolio volatility during sharp downside movements.
Between worries about the performance of your investment portfolio(s) and the challenge of paying bills and managing finances on a daily basis, it is no wonder that many Americans report that they are stressed out about money. One survey, by the American Psychological Association, found that 72% of those polled reported recently feeling stress related to money.
For some investors, the nerve-wrenching gyrations in the stock market may cause them to question whether the do-it-yourself investment plan is the best approach to take. With so much uncertainty in the financial markets, using the services of a CERTIFIED FINANCIAL PLANNER™ Professional and/or a CERTIFIED ESTATE PLANNER™can help bring your financial planning into balance.
Whether you decide to work with a financial professional in the Lakewood, Co area or deal with the stress of managing your finances by yourself, there are a number of steps you can take to deal with the volatility of modern markets and the challenge of creating and implementing a financial plan. The key is to develop a plan designed to help you prosper in an ever-changing financial environment.
Planning strategies should seek to save you money by utilizing tax breaks where possible. They should also be stress-tested to offer you protection when you need it most. Collaboration with strategic partners can be helpful in this process. For instance, accessing expertise in tax and estate planning is vital to drawing up a comprehensive financial plan. Working with advisors in these areas can help you grow your wealth while protecting your assets and minimizing tax liability.
To create a custom-tailored financial plan, the fiduciary advisors at The Normandy Group believe it’s important to keep the following elements in balance:
- Personal Wealth: Who you are, what you stand for, your life’s experiences, both good and bad
- Social Wealth: Who and what you care about, and why (family, friends, causes)
- Financial Wealth: Personal finance, insurance, investment assets
Understanding how these factors play into your financial life can go a long way in helping to reduce financial stress. Some concrete steps you can take to use this knowledge to de-stress managing your finances are as follows:
Prioritize Your Goals
Prioritizing your financial goals is essential to reducing the stress of dealing with money. Rather than giving equal weight to discretionary expenses like going on that exotic vacation or buying the latest model car, prioritize your most important goals. This means funding basic expenses like paying your bills first. After that, allocate funds to future goals such as an emergency savings fund, and setting aside money for objectives such as retirement, purchasing a home, etc. Any money left over could then be spent on discretionary purchases.
If you take this approach, you can gain confidence from the progress you are making on your most vital financial goals, rather than feeling down because you don’t seem to be getting any closer to reaching them. The positivity generated by this progress can carry over to your other financial objectives, helping you accomplish them as well.
Set goals that are easily attainable. This often means breaking them up into segments. For instance, instead of trying to set aside the entire down payment to purchase a home at once, set aside a more manageable amount for that purpose over a period of months or years. Using this type of strategy allows you to achieve numerous small victories rather than feeling defeated because you can’t achieve a goal all at once.
Secure Your Wealth
Another way to lessen financial stress is to arrange for protection in case of an emergency. Building an emergency savings fund is crucial in this regard. Typically, having between three to six months income in liquid savings set aside in case of emergency is recommended.
Another way to reduce stress-related to money is to take steps to protect yourself and your loved ones from unexpected events by transferring risk through insurance. This can include:
- Homeowner’s and car insurance
- Disability and long-term care insurance
- Life and health insurance
Don’t Let Market Volatility Disrupt Your Plans
Investing in financial markets may have the ability to provide positive long-term returns, but dramatic moves both up and down are commonplace. If you feel compelled to follow its day to day movements it can exacerbate your stress, potentially causing you to make poor investment decisions.
Try to stay focused on your long-term goals and avoid the temptation of making frequent changes in your investment portfolio. In this regard, it can be beneficial to work with a financial advisor who can help you both design a long-term investment strategy and stick with it during times of market volatility.
Defeat Financial Stress with the Right Perspective
Financial stress often comes from uncertainty about your finances. Therefore, it is important to take a long-term approach not only to your investments but to your budget as well.
By committing to following your financial plan over the long haul, you can gain the peace of mind that comes from knowing that your plan is flexible enough to deal with any short-term setbacks you may encounter.
Having the proper perspective to deal with financial stress and protect your family’s financial plan stems from understanding the financial planning process. Such stress may fade away, or at least diminish, once you are confident that you have taken the steps necessary to secure your family’s financial future in accordance with your plan.
At The Normandy Group, we want to help prepare you for whatever comes your way. Our Dynamic Wealth Design goes far beyond just financial planning. We focus on helping your wealth stay safe from the obstacles that commonly knock people off course. That includes helping protect your assets from outside threats and making sure we address the gaps. Contact us today, and get on the right track for a more stress-free retirement.
Download our free eBook “6 Simple Steps to a More Confident Retirement”: