Financial Planning as a Show of Love

We are in the season of two “special” days that deal with commitment. One of them, “Ditch New Year’s Resolution Day,” is about breaking a commitment. The other, Valentine’s Day, is about making a commitment to another person, at least in theory. Both can teach us something about commitment, accountability, and love for yourself and others – three things that can be major motivators to get yourself on track and keep yourself on track with a plan regarding your personal finances.

You probably missed “Ditch New Year’s Resolution Day.” It was January 17th. We have no idea who made it up, but we confident it is obscure enough that you didn’t give or receive a greeting card, flowers, chocolate, or lingerie in celebration of it. But ditching New Year’s resolutions is a fitting concept since many of them are forgotten. Resolutions that deal with finances are commonly made, and like most resolutions, are also commonly broken.

Valentine’s Day as a Motivator to Consider Your Personal Finances

Let’s examine Valentine’s Day as a motivation for getting your personal finances in order. We know. That doesn’t sound very romantic since chocolate, wine, and greeting cards are usually not part of a financial plan.

But what better way is there to show your love and commitment to your significant other or your family members than to get your financial affairs in order. Even if you are single and not connected strongly with family, consider taking care of your personal finances and financial planning as a show of love for yourself.

There are several common events we have heard over the years that motivate people to seek a financial advisor. Typically, they involve change, or anticipated change, and can include:

• New job
• Marriage or divorce
• Acquisition of new assets (inheritance, bonus)
• Care for aging parents (or becoming an aging parent)
• Passing on wealth
• Planning for retirement

Among the age range targeted by readers of Prime Women, all of the above reasons are common.

Naturally, we think the knowledge and expertise of an advisor can bring significant value to the table. Unlike Valentine’s Day, relying solely on sentiment or making financial decisions “from the heart,” can lead to poor planning. A professional advisor can bring information on key life plan topics other than solely investments, plus they have the advantage of witnessing a variety of life circumstances that can provide the insight you might not have.

When you approach your financial plan, we recommend that you ask yourself these questions, and clearly know and understand the answers:

• “Do I know why I own what I own?”
• If retired, “Do my investments, combined with other sources of recurring income, provide for my preferred lifestyle?”
• If not retired, “Are my assets positioned to help me achieve financial independence with an adequate level of predictable cash flow?”

Planning starts with figuring out what you want in retirement, figuring out how much money that takes, and then figuring out how to get there without losing your nest egg. Money can’t buy you happiness, but it can buy you choices.

Getting your personal finances in order involves more than just investments. Other factors can include risk protection, often in the form of insurance; legal documents to make sure your plan is implemented in the way you intended; consideration for special needs family members; financing education for grandchildren and others; and many more.

In 2021, Americans spent $21.8 billion on gifts and activities related to Valentine’s Day, and according to the National Retail Federation¹, this amount is expected to rise to $23.9 billion for 2022. The general trend has been upward since 2004, with only 2009 and 2010 being the years with the lowest sales – $14.67 billion and $14.13 billion, respectively.

You could get creative with “gifts” this year. Maybe you could share the outline of your plan, will, and other life documents with your family and/or heirs. Maybe you could use the occasion to discuss and agree with your significant other to make working on a plan for your personal finances a priority.

Maybe you could open an investment account for a child or grandchild and make a small deposit to get them started with investing.

Maybe this can be a year for you to do it differently and use the celebration of love as a motivator to love yourself more by improving your financial life.

To discuss all the aspects of a comprehensive financial plan with a financial advisor, contact our team.