Money Matters

by Madeleine Maccar | Jun 13, 2024
Money Matters
 It’s no secret that the buying power of the dollar isn’t what it was even a year ago, and South Jersey families are certainly feeling the financial crunch from the gas station to the grocery store. 

Beyond the challenge of adjusting to inflation and making do with paychecks that don’t always keep pace with annual cost-of-living increases or safety nets that could be wiped out in one emergency, it’s also daunting to consider the cratering impact life’s challenges could have on long-term plans, like paying for a child’s college education and staying on track with one’s retirement goals. 

Financial planning isn’t a simple undertaking, especially if you’re trying to go it alone. And it can be a lot for any household to take on navigating today’s overwhelming mix of economic fluctuations, political uncertainty, disturbing international developments and stretching one’s income as far as possible while still trying to eke out some joy from the present. 

Assembling a team of trusted advisors can increase one’s access to a multifaceted wisdom of experience that can help guide their financial decisions and asset accumulation. Having any mix of an accountant or CPA, attorney and wealth advisor in your corner can help yield objective insights tailored to your position and goals, cutting through the noise and distractions to keep you fiscally on track with advice adapted to your unique needs and goals. 

Financial advisor Amy Begnaud, CFP, CDFA, a principal at Begnaud Wealth Management Group of Janney Montgomery Scott LLC, notes that it’s not uncommon for people to complicate their own financial planning with a combination of inactivity and not seeking advice from the proper channels. 

“The biggest mistake an investor can make with regard to investments and financial planning is procrastination,” she says. “Some common examples would be: Sitting in cash because it’s the only safe choice, being on autopilot in a 401(k) or investment account because it will ‘hopefully’ all work out, staying with a complacent financial advisor because it’s easier than looking for a new one or hurting that advisor’s feelings. … However, the No. 1 [mistake] I’ve seen people make as they chart out their financial roadmap is thinking they don’t need a financial advisor. Being proactive and working with an expert in any area of life can prove to be beneficial: investing and financial planning is no different.”

While Stan Molotsky, president and CEO of SHM Financial Group, notes that there’s “all kinds of moving parts” to consider when imparting individualized financial advice, he is adamant about saving up “as early as possible” to find some peace of mind through both taking control of your financial future and accounting for life’s myriad unpredictable bumps in the road. 

He notes that letting your money work for you with investments tailored to your risk appetite—a tolerance that inherently skews more conservative as your goal date grows closer since there are diminishing opportunities to make up for market stumbles and investments that never paid off—and taking advantage of beneficial retirement-contribution plans can nudge the odds in your favor, as long as you use the tools at your disposal knowledgeably. 

“You want to make sure that you know where you’re putting the money and what the costs are. Sometimes, people will automatically put money in their 401(k) or 403(b) plans—there are a lot of good ones, but there’s also a lot of terrible ones that don’t make sense to even participate in,” he begins, citing an example like paying more in fees than you’re actually earning in interest. “The key is to get started. If you take a small percentage of whatever money that you’re bringing in to allocate for later, whether later is six months, six years or retirement, you’re going to be so much better off. It’s like paying yourself first by giving yourself a deduction on your income coming in, putting it off to the side and letting it compound over a period of time. It’s amazing how the compounding of money, especially on a deferred basis, can work, whether it’s through an annuity account, an IRA or a 403(b).”

For those who faced tight finances in their early adult life or weren’t able to start saving right away for any number of reasons, Begnaud has some assurance—as well as some practical advice to make up for lost years, like getting some face time with those aforementioned trusted advisors. 

“Start saving as much as you can now; particularly, max out payroll deferral into your employer retirement plan, where you may also receive an employer match [of] ‘free money,’” she suggests. “If you don’t have an employer retirement plan, set up or add to an IRA or Roth IRA (income limits apply). Talk with your financial advisor about other tax-advantaged saving strategies and a plan for building wealth for retirement.”

Molotsky champions “hoping for the best but preparing for the worst”both as a life philosophy and approach to safeguarding your financial future. After all, forging ahead with both diligence and optimism in equal measures encourages one to regard the future with both hope and a natural desire to protect that dream of reaching their retirement goals with the freedom that a well-made plan allows for. 

“You have to know who you’re working with, you have to know your risk tolerance—how much risk you take with your money, if anything at all—what that money is for, and whether you want your money to be ‘green money,’ or non-risk, or ‘red money,’ which can give you more potential on the upside as long as you understand there’s some risk in those things and balance it out,” he says. “There’s a lot of information out there and there’s no fixed answer for everybody, so you have to know what’s the right thing for you.” 

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Author: Madeleine Maccar

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