Financial education is vital at every stage of life, from early budgeting to retirement planning. No matter where you are on your financial journey, there’s always an opportunity to invest in your financial well-being. Pure’s Incoming Financial Advisor, Alexandra Bellini, CFP®, shares simple tips to enhance your financial literacy.
She discusses:
- Creating a budget
- Saving effectively
- Understanding where your money is going
- Planning ahead for pitfalls
Transcript
No matter what stage of life you are in, there are some simple things you can start doing right away to improve your financial literacy with these four essential skills:
- Creating a budget
- Saving effectively
- Understanding where your money is going
- Planning ahead for pitfalls.
First off, let’s talk about creating a budget. A 2020 Intuit survey revealed 65% of Americans did not know how much money they spent in the previous month1 . Tracking your expenses is extremely important, because without a surplus in cash flow, it becomes impossible to fund your financial goals.
Second, you need to develop a saving strategy. Start as young as possible, as the power of compounding returns is profound. Don’t worry about trying to time the markets or waiting for that downturn to happen so you can buy at the low. Odds are, you’ll miss the bottom, or be to nervous to buy into a downward market. Time in the market, and not pulling funds out in a downturn, yield the most stable rate of return every single time.
Third, you need to understand where your savings are going. Making sure your savings are being directed to the right accounts is crucial. It is best to diversify your savings amongst, tax deferred, tax free and taxable accounts. This allows you to have more control over your taxes upon withdrawing the funds.
Lastly, let’s discuss some common pitfalls. One of the most common pitfalls people face is not having enough savings to last them through retirement. A lot of the time, this is due to the fact that they did not consider the tax consequences of withdrawing from a tax deferred account. Other common pitfalls are: Underestimating medical expenses and taking on debt or bringing unresolved debt into your retirement.
It is important to hone your financial skills and be accountable for you own financial well-being. No, you don’t have to be as well versed as a professional on Wall Street, but using these few simple tips can help improve your situation. Want to know where you stand financially? Contact Pure Financial Advisors for a free financial assessment now.
1 Source: Arizona Central Credit Union, Budgeting 101: How to Use the 50/30/20 Rule, June 2021.
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IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® – The CERTIFIED FINANCIAL PLANNER® certification is by the CFP Board of Standards, Inc. To attain the right to use the CFP® mark, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. 30 hours of continuing education is required every 2 years to maintain the certification.
AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.
