Practice Management Toolkit
Frequently Asked Questions (FAQ)
Give Direction to Your Finacial Future
Q – I like the idea of setting financial goals, but how do I get started?
A – It is not as difficult a process as you might
imagine if you follow the steps outlined in the article. Set aside an evening
or weekend afternoon for yourself or you and your partner, if you are part
of a couple. Put three columns on a piece of paper labeled short-term, intermediate-term,
and long-term goals. Then write down what ever comes to mind as objectives
you would like to achieve at this point in time. Don’t worry about the
order in which the items appear. After you’ve racked your brain, go
back over your list, and rank them. That’s it you’re done. Now
compare your list to that of your partner. Combine common goals but retain
your individual goals, if they do not take away from your joint objective.
Q – How often do you have to monitor your progress toward your goals?
A – That is very much an individual decision. If you
are young and your lists of goals are pretty short, and not much is changing
in your life, then perhaps once a year would be sufficient at a minimum. At
the other extreme, if you are hoping to retire in a couple of years, you may
want to examine your financial goals at least once a quarter to make certain
you are doing all the right things so you can retire as planned. The key is
to individualize the monitoring, so you have adequate time to make adjustments
in your financial management should events unexpectedly alter your plans.
Q – What if you realize you cannot achieve all the goals you
have set for yourself?
A – That is one of the realities of life. We don’t
always get everything we want. The best way to address this is to go back
to item 5 on the list and “prioritize” those goals. You’ll
have to make some difficult choices, and in all likelihood that will mean
you must give up one thing to get another. In fact, people struggle with conflicting
goals every day.
How do you manage your money so you can have a comfortable lifestyle now,
save for your children’s (or future children’s) college education,
AND put money away for your retirement? Conflicts such as these illustrate
the conflict between your short-term, intermediate-term, and long-term goals.
Planning-The Key to Saving and Investing
Q – What if I can only save $100 per month. Should I still
try to invest?
A – Yes, by all means. Even if you are unable to make
the maximum contribution to your employer’s retirement plan, an individual
retirement account (IRA), or other savings vehicle, $100 saved is better than
nothing.
Q - What if I only have enough money to contribute to one account,
where should I invest?
A - Most financial professionals will tell you that if you
have to choose, it may be more beneficial to put that money in a tax-deferred
(retirement) account. But in doing so it is assumed that you are able to lock
that money away for the long term. Once retired, you’ll be glad you
started investing at a young age.
Q - I don’t know much about saving and investing, so can I become
better informed on these subjects?
A - Visiting the Crest Learning Center on a regular basis
is a start. After all, the intent of this website is to provide you with information
you can use to enrich your personal and professional life. Get your personal
finances in order and a lot of other things fall into place.
Another good and inexpensive resource is your local public library. You can
find reference material, books, and countless personal finance and business
magazines sitting there waiting for you. Take a Saturday afternoon or evening
to visit your library and see what you can discover.
Do you have questions?
We’d love to hear from you. So if you have any questions about this topic
or some other subject, please click
here.
And don’t forget to visit the Crest Learning Center website often to
look for updates.
Note: Practitioners who offer a retirement
plan through their practice have a fiduciary responsibility to educate their
employees about their plan and investment principles. By encouraging your employees
to avail themselves of the free information on this website, you will take another
step in demonstrating your compliance with Regulation 404(c). This subject of
ERISA 404(c) compliance is explained in Series 4 of the Personal Finance CD-ROM
and will be covered here at a later date.
