Assessing Your Financial Health to Make Your Money Last

ASSESSING YOUR FINANCIAL HEALTH

TO MAKE YOUR MONEY LAST

by The SecondHalf Coach Wealth Management Team

To live a long life, you’ll need a healthy supply of money to go the distance with you. The risk of outliving your money is called

“longevity risk”. This paired with recent history has moved many of us to take another look at our finances – a smart thing to do in any economy. Maybe it’s been a while since you took your financial temperature or maybe this is the first time you’ve considered it. Either way, the time is right to make sure you are financially healthy, and following the good financial habits outlined below will help increase the likelihood your money will last as long as you will.

Step 1: Current Status

Start by evaluating where you are today by tracking your current income and expenses. Do you have a budget? Do you itemize monthly expenses to visualize where your funds are going? If not, writing it down may help you pause when deciding whether to buy those monthly extras.

Within this step it’s important you set clear short and long-term goals with a financial plan to pursue each goal. The plan can be as formal as you’d like but should be a written plan of action. Even though the market can provide a rocky ride at times, try to stick with your plan. Living within your means will help you not overspend, pay off monthly bills and eliminate needless spending to eliminate debt. Maintaining a healthy budget and balance sheet will help hold you accountable and prioritize which high-interest rate debt needs paid first.

Step 2: Make Changes

Once you’ve got a handle on where your finances fall, set some goals that will help you achieve better financial health. Make them realistic and hold to them. For example, if you have more credit card debt than you’d like, set a goal to pay it off by a

certain date. If your savings are slim, make a goal to save enough money to cover six months or more of expenses within a given time frame. Revisit these goals every few months and make sure you’re on track. If you are, give yourself a small reward. If you’re not progressing as you’d hope, make necessary changes.

The key to making these changes is becoming aware of where it is needed. Saving habits set the tone for your earning and retirement years. Start saving early and allow time and the power of compounding interest to work in your favor for long-term financial strength. Longevity risk and inflation risk (having your purchasing power erode over time) are bigger threats to your long-term well-being than short-term market movements. Paying yourself first prioritizes saving for the future and contributing to your 401(k) plan or other savings vehicle may reduce temptation to spend on unnecessary purchases.

Over time, subtle changes you make will help you to save more and pay off debt, increasing your net worth. Reviewing this figure each year is a good way to track your progress. Particular focus should be on your investments, monitoring your asset allocations, needs, goals, and risk tolerance that may shift gradually as you age (1). Benefit may come from broad diversification, and annual or more frequent reviews should be performed to compare your return to similar investments, rebalancing and making changes as needed.

1. Asset allocation does not ensure a profit or protect against a loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.

Diversification does not protect against market risk.

The key to making these changes is becoming aware of where it is needed.

Step 3: Keep Going

It can be hard to change habits. With proper motivation and periodic progress reviews, you can do it. Can you drive your car a year or two longer? Can you dine out less often? As you see your savings build with your thoughtful spending choices, you’ll be encouraged to continue.

As you work toward these short and longterm goals it is also important you protect your family, so the plan is not derailed if anything happens to you. Life, long-term care, health and disability insurance, as well as an up-to-date estate plan can help you achieve this protection.

Thoughtful choices mean keeping yourself informed. Don’t buy on impulse; instead, shop for the best deals, whether you’re buying groceries, tires or phone service. Use coupons, buy generic and bundle services. Be willing to let go of less important (but long standing) expenses like unused gym memberships or an unneeded household telephone line. Think of these cuts as contributions to your long-term savings plan.

Remember, you are ultimately in control of your financial health. Make it happen.

Jessica M. Marazza CFP®, William J. Urbanik, MBA and Anthony E. Slezak

2519 Ligonier St. P.O. Box 421 Latrobe, Pa 15650 724.537.2799 www.shcwealthmanagement.com info@shcwealthmanagement.com

SecondHalf Coach Wealth Management

SecondHalfCoachWealthManagement

SHCteam

This material is for education and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

This material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.