Category: Blog

Estate Planning Is Essential — But Even More So for Women

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When it comes to women and estate planning, we at The Humphreys Group agree with the prevailing wisdom among financial experts: Women should be advised and empowered to develop estate plans that reflect their unique life experiences. In many cases, this means the focus of a woman’s estate plan will differ from a man’s estate plan. Let’s discuss why:

Women today lead dynamic and complex work lives. More than ever, and in all aspects of society, working women are forging ahead with their professional careers. However, many women also continue to step out of the paid workforce for periods of time — most often to care for children or other family members. Such variances in employment can potentially impact a woman’s financial well-being in ways that may include lower earnings, less money in savings and fewer profitable investments over a lifetime. This means estate planning plays an important role in ensuring every woman’s long-term economic security.

Women often live longer than their partners. It’s meaningful to keep in mind that most women who lose a partner usually take over their own financial destinies, and also ultimately determine how they will allocate their finances to other family members, taxes, charities and additional sources. Should such a situation occur, it’s helpful for a woman to be prepared and to know what to expect from her estate planning efforts.

What does estate planning that incorporates a woman’s point of view look like? We encourage you to explore the articles we’ve linked to in this blog post, in addition to considering a few takeaways:

  • Develop a will, a living will and a durable power of attorney for health care. These core documents are a good place to begin the estate planning journey. Women should make sure any estate planning-related paperwork reflects how they specifically wish to designate and delegate their personal and financial assets and, should the need arise, health care on their behalf.
  • Operate with a sense of security, confidence and planning. Advisors recommend that one should secure any information related to their estate plan for safekeeping and note that information about accounts and documents should be shared with a limited number of trusted individuals, among them a financial advisor. Further advice: Hold conversations with relevant family members about your estate plan long before the plan is enacted. Topics to address might include business succession plans, inheritances or proposed charitable giving.

We believe women are best served when they are knowledgeable about their family finances as well as in charge of their individual financial responsibilities and strategies. Contact The Humphreys Group to learn more about how estate planning can benefit you.

Diane Bourdo Speaks to Ellevate Network About Women’s Financial Empowerment

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From pop culture to the talking heads you see on nightly financial news programs, the investment world has long been characterized by a certain type of imagery. You know what we’re talking about: Men in suits spouting off tips about the next “hot stock.” Men on the trading floor, surrounded by ticker tape and loud bells.

What’s the common feature in each of these images? Men. Women are never included in these depictions, which has given way to a systemic bias, constructed since the early days of Wall Street: Women don’t — and shouldn’t — invest.

But the problem with that bias (beyond the obvious)? It simply isn’t true. A recent Fidelity Investments study showed that women investors actually outperform male investors by 0.4%. Moreover, women trade less often, react more patiently to market volatility and are less focused on achieving “social status” benchmarks, such as “beating an index.”

Yet, there is still a common perception among women that assumes the opposite. For instance, in the same Fidelity Investments Study, only 9% of women believed they could outperform men in investing. So, how can we change the conversation?

Last week, I teamed up with Ellevate to work hand-in-hand with a small group of women who were seeking financial empowerment and guidance. During the event, I shared some cornerstone financial skills and insights; guided participants through fundamental financial planning exercises; and helped them discover some inspiration that lies in the possibility of financial security.

Here are a few key points from our discussion:

Financial Planning 101

At The Humphreys Group, we have always believed in the importance of establishing financial goals that match up with your values — these are the people, priorities and ideals that matter most to you. Taking this approach allows you to gain a more holistic, big-picture view of your financial future and sets you on a more rewarding and intentional path toward achieving your goals.

After discussing this approach with the group, we broke down financial planning to a more granular level, introducing the concept of the “financial dashboard”: A top-level view of the key figures you can use to identify your level of financial wellness, including income, expenses and net worth. Today, there are plenty of convenient, digital tools you can use to keep a pulse on your financial dashboard, such as Mint, YouNeedaBudget and Tillerhq. By focusing on the basics of financial planning first, we set a strong foundation for the next segment of our discussion:

Investing 101

“Should you invest or save?” “Why invest in the first place?” We kicked off our discussion on this topic by answering some of the questions that all new investors face.

At its most basic level, investing is the process of buying an asset for the potential of it growing in value. As opposed to saving, investing gives you the valuable opportunity to grow your wealth over time — and regardless of what goals you have set for the future, it’s important to start investing early, proportional to your time horizon and tolerance for risk.

After reviewing some basic, yet essential investment principles, we discussed some critical steps all women should take to maximize their savings for one of the most important milestones they’ll face: retirement. Two basic steps include:

    • Maximizing Your Employer Match: Make sure you have a strong understanding of what your company offers, in terms of matching contributions, and how that affects your retirement goals.
    • Choose Your Retirement Accounts Wisely: Before jumping straight into some of the most typical savings vehicles, such as a 401(k) or a standard savings account, take time to research and evaluate your options. Review your potential tax liability with each account before making a final decision.

Take Control Over Your Financial Life 

Beyond the practices of financial planning and investing, there are countless other financial issues and challenges that affect our day-to-day lives. Should you pay off your debt or invest in a retirement account? Should you direct your savings toward your children’s college education or stock them away for your future retirement? What about insurance against unexpected events? Planning for future health care expenses?

The answers to these questions are different for every woman — because every financial situation is unique. Of course, there are general guidelines and principles that can help you get a better grasp on your money and empower you to make the most informed decisions.

The most important step is to simply get started. If you need a resource to help you put your best foot forward:

Check Out Rewriting the Rules: Telling Truths About Women and Money”

Our new book debunks some of the problematic myths that have held women back from financial independence, while empowering you with practical solutions and actionable tips to take control of your financial life. We encourage you to download your free copy, and let us know what you think!

If you’re ready to learn more about financial planning and investing, we also encourage you to contact our team at The Humphreys Group. We can help answer your most pressing questions, and help you set and achieve your goals through the power of focused financial planning and disciplined asset management.

3 Tips to Manage Crucial Conversations With Your Parents

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We’ve acknowledged time and again that, for many of us and for a variety of complex reasons, it’s not easy to manage crucial conversations about finances with those closest to us; we also realize that talking about aging — especially when the topics are related to health care and money matters — can be difficult. Difficult, but not impossible.

As we observed in our previous post, conversations we have these days about aging and health care must account for several stark realities: Premium costs for long-term care policies have been steadily rising for decades. These costs will continue to rise as the populous baby boomer generation retires and draws on both public and private care benefits and, in general, as more Americans live longer.

We offer the following, additional pointers to help you start talking to your parents or other aging loved ones about long-term financial plans and health care:

  • Start broadly. At The Humphreys Group, we believe in examining how the “big picture” of our lives informs our financial planning. We encourage clients to examine their attitudes, goals, dream and values — not just about money, but about how these concepts guide both their short-term and long-term decisions. We encourage them to engage in similar discussions with the aging adults in their lives. (Again, most often, this will mean parents.)
  • Get specific. Once our clients are able to better understand their aging loved one’s outlook and approach to life and work, it’s time to ask more pointed questions related to the loved one’s financial health and plans. We recommend asking questions about savings and investment plans, debt load and estate plans; whether a loved one has sought professional financial advice, and health care preferences. The goal of these exchanges is to try to understand what resources are available for aging loved ones, including what they will be able to afford when it comes to their care.
  • Keep the conversation going. As financial experts, we know life, work and health conditions are subject to change, sometimes rapidly and dramatically so. With that in mind, we suggest that those who begin to ask about their loved one’s plans for aging continue to do so. This can help gauge whether or when an aging loved one may need to seek additional advice or assistance with their finances, investments and long-term health care.

With research that shows the nation’s retirement population is growing larger, living longer and requiring sustained health-related services, we believe it’s important to learn what kinds of care older loved ones want and can afford. Financial planning plays a role in talking about aging and health care, especially since rates for many long-term care insurance policies and related services are rising in response to aging trends.

You don’t have to do it alone. Contact The Humphreys Group to learn more about the steps you can take to help a loved one plan for their potential long-term health care needs and challenges.

A Guide for Helping Your Loved One Plan for Long-Term Care

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We at The Humphreys Group realize what multiple studies show: The population of those living into older age is getting larger in the United States and will continue to do so for some time. As costs keep rising to meet the growing demand for health-related services for the elderly, there is an increasing need for aging adults and those who are close to them to plan for their long-term care.

However, we know it can be challenging to begin talking with aging loved ones about their long-term care preferences, especially when home, health and finances are involved. And so we offer the following suggestions on how to start the discussion:

  • Do your homework. Before you begin a discussion with an aging loved one — and before an aging loved one requires health assistance — acquire a basic knowledge about the many different types of longer-term health care. Also determine what types of care are available where your loved one lives, and gain a general sense of what the potential costs of such care may be. Begin to introduce the topic of long-term care into conversations as a way to prepare for specific talk about the issue.
  • Listen. Before you make any big decisions, share your questions and concerns about your aging loved one’s well-being, and have them share their wishes and concerns with you about their long-term health care. Work together to develop a concrete yet flexible strategy to address health-related issues that may arrive with age.
  • Plan. Once you have a better sense of a loved one’s long-term health care preferences, it’s time to help assess their financial circumstances. These types of costs are varied and complex, and it’s no secret they are rising and will continue to do so for the next decade or more.
  • Consider outside advice. If your loved one hasn’t already done so, it may be helpful to work with an experienced and trusted financial advisor to develop plans that can support paying for long-term care. We also recommend both you and your aging loved one keep in touch with other individuals, as well as personal and professional groups, that can provide information about long-term health care and assist in addressing physical, mental, spiritual, emotional and financial challenges that arise along the way.

We are well-aware that growing older is a dynamic process, marked with unique experiences that are as numerous and varied as those individuals living long lives. Our next blog will focus on how to begin a conversation about long-term health care. Contact The Humphreys Groups for professional guidance on how you can work with an aging loved one to help them secure and afford the kind of long-term health care they want.

How to Balance Caregiving With Your Career Aspirations

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We already know from research and day-to-day experiences that many women continue to play a primary role in caring for their children while balancing their careers. But recent studies also reveal women increasingly assume unpaid caregiving responsibilities for adults in their lives — most often for their parents. Sometimes, these caregiving responsibilities become full-time jobs themselves and cause women to put their professional career aspirations on hold so they can support their family members and loved ones.

As we work with our clients to secure their financial growth and health, we at The Humphreys Group are studying how taking on the role of “unpaid caregiver” can affect a woman’s employability and long-term finances. We’ve learned that it is particularly important for unpaid caregivers to stay diligent when developing their investment plans.

A variety of industry reports and media sources (such as these articles from The New York Times and The Atlantic) reference studies that reach similar conclusions: women’s savings, earnings, benefits and future employability are all at risk when they move from the paid workforce to take on the unpaid work of caring for an ailing parent. While some organizations are making progress toward developing policies that offer unpaid caregivers social, emotional, physical and financial support, many workplaces and current employment practices still do little to account for the time and attention that unpaid caregiving demands of working professionals.

How would you prepare if you were called upon to serve as an unpaid caregiver at some point during your working life? At The Humphreys Group, we apply a four-step strategy, steeped in our experience and knowledge, to help clients maintain their financial well-being, whatever their life circumstances. Together, we:

  • Discover what matters most to you. We learn about your values, goals and dreams, and answer any questions in a spirit of partnership that establishes clear communications about how we will work together to realize them.
  • Plan for changing life circumstances. We provide you with a comfortable, collaborative setting that enables you to keep moving forward with confidence in your financial life, as well as personally and professionally.
  • Invest with discipline and perspective. We take our responsibility to ensure each client’s well-being seriously, and use the science of capital markets to help build resilient portfolios that can weather the wide ranges of market volatility.
  • Connect in small group discussions. For many of us, talking about money and financial plans, especially with those closest to us, can be a tension-filled challenge. In small groups that meet periodically, we foster ways that help our clients feel more comfortable and gain confidence to have those conversations. Our “Insights & Outcomes” Conversation Circle series prompts women to discuss, contemplate and connect with each other about the important aspects of finance and investing that lie outside of the numbers.

We believe women should understand how taking care of their aging family members may impact their lives. If you believe you may be called upon to assume an unpaid caregiving role at some point in your career — or are already doing so — contact The Humphreys Group to start a conversation about how we can help you secure and maintain your well-being.

Mid-Year Wellness: The Credit vs. Debit Debate (Part II)

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It’s official: 2019 is nearly halfway over, which means that now is the time to pause and take stock of your total wellness. This includes your spending habits and where you stand in your progress toward your year-end goals. What methods do you actually use to make purchases? Do you favor debit cards over credit cards? Which method is “safer”?

Our Financial Planning Associate, Hallie Kraus, is tackling these questions in a new, two-part blog series. If you missed Part I of the series, click here to get up-to-speed. In Part II, Hallie explores the benefits of using a debit card to make purchases and is sharing some resources you can use to make smart spending decisions.

Now that you know the potential benefits — and risks — that come with using a credit card to make purchases, it’s time to take a look at the other side of the payment spectrum: the debit card.

When Is It Best to Use a Debit Card vs. a Credit Card?

When you want to manage your spending or avoid debt. This is, by far, the best reason to use a debit card, and it’s not insignificant. If you’re trying to reel in your expenses, or if you’re the kind of person who simply likes to have more structure to keep your expenses in line, debit cards are the way to go, simply because you’re only paying with money you already have.

Unfortunately, these days, card “skimming” has become more prevalent, in which fraudsters use small devices to steal card information in an otherwise legitimate transaction. Keep in mind that most experts discourage the use of debit cards at gas station pumps or independent ATMs, where skimmers are most likely to target.

You want to minimize fees — for you, as the consumer, and for the merchant. Using a debit card means you never risk the possibility of incurring interest, late fees or annual fees — all of which are associated with most credit cards.

Merchants, on the other hand, pay a processing fee to card issuers in order to accept both credit and debit cards. The processing fee for credit is typically a percentage of the customer’s purchase, while the processing fee for debit is lower, and often a flat fee. So, it’s actually cheaper for merchants when you, as their customer, elect to have a debit transaction — something to keep in mind if you want to do what you can to help the profit margins of your favorite businesses!

The Bottom Line

Regardless of whether you use a debit or credit card to make purchases, it’s important to keep the following tips in mind:

Monitor your transactions regularly. The sooner you report a fraudulent transaction, the better. Make it part of your routine to check your activity on a regular basis and report anything suspicious to your bank as soon as possible.

Only you know your habits and what’s best for you. Be honest with yourself about your financial strengths and weaknesses, and use that to determine which card make the most sense for your lifestyle and spending habits.

Check your credit report on at least an annual basis. You can view and download your credit report from each of the three bureaus for free once per year by visiting www.annualcreditreport.com. This is yet another effective way to monitor for fraudulent activity and familiarize yourself with what makes your credit tick.

There are plenty of resources available to help you practice smart, diligent spending. When it comes to monitoring fraud, one of the best guidelines is the Federal Trade Commission (FTC) website, which also offers plenty of advice regarding lost or stolen credit and debit cards. If you would like to learn more about the pros and cons between debit and credit cards, check out this article by AARP and this piece by The Simple Dollar, both of which provide comprehensive and unbiased overviews of both methods.

And, as always, The Humphreys Group is here to help answer all of your personal financial planning questions. If you would like to learn more about saving and spending best practices, contact our team.

Mid-Year Wellness: The Credit vs. Debit Debate (Part I)

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Now that we have officially reached the halfway point of 2019, there is no better time to stop for a “breather” and take stock of your total wellness — and that includes your spending habits and how they factor into your progress toward your year-end goals. This brings us to a few questions we receive quite often here at The Humphreys Group: What should you actually use to make purchases? Are debit cards the “safer” method, or do credit cards rein supreme?

Our Financial Planning Associate, Hallie Kraus, is shedding light on the debate in a new, two-part blog series. Scroll down to read Part I, and then catch Part II here.

“Credit or debit?” We’re asked this question all the time at the register – but which payment method is actually best to use? And what’s the true difference between the two?

Let’s start with a basic recap: Debit cards are directly connected to your checking account. When you make a purchase, funds are withdrawn from that account immediately and transferred to the merchant.

Credit cards, on the other hand, are connected to a line of credit from your bank. When you make a purchase, you’re borrowing funds from your bank to pay the merchant. If you don’t pay off everything you owe each month, your bank will charge you (usually very high) interest on the remaining balance.

When Is It Best to Use a Credit Card vs. a Debit Card?

When you want to build your credit. If you’re planning on buying a home or car, lenders first want to see that you have a good credit history. And when you use a credit card, your balance and history of payments is reported to a credit bureau each month, creating a record — and, essentially, a narrative — of your financial habits and trustworthiness to lenders. Using a debit card is not reported to credit bureaus and therefore doesn’t create any sort of history.

Of course, simply using your credit card alone doesn’t help your credit; what matters is if you use it responsibly. If improving your credit is truly a priority for you, make sure to keep your credit card balance below 30% of your limit (for example, if you have a $10,000 limit, keep the balance below $3,000). You’ll also want to pay off the balance in full, and most importantly, pay your credit card bill on time every month. Not doing any of the above will negatively impact your score and thus be counterproductive.

When you want to minimize your fraud liability. This is perhaps the most compelling reason to use a credit card. Firstly, when a fraudster uses your credit card without permission, they’re technically stealing money from the bank that issued you the card — not from you personally. But what you may not know is that credit cards also offer more robust fraud protection.

Thanks to the Fair Credit Billing Act (FCBA), if you report unauthorized charges to your card issuer within 60 days, your liability for fraudulent transactions is limited to $50. Even better, the vast majority of credit card companies (Visa, MasterCard, American Express and Discover) have a zero-liability fraud policy. Essentially, assuming you report credit card fraud promptly, you will probably never pay for unauthorized transactions.

In contrast, when a fraudster uses your debit card, they have immediately stolen money from your bank account. And although debit cards have their own set of protections through the Electronic Funds Transfer Act (EFTA), they are much less robust. According to the EFTA:

  • If you report a fraudulent debit card transaction within two business days, your liability is limited to $50.
  • If you wait longer than two days to report the fraudulent transaction, you can be liable for up to $500.
  • If you wait longer than 60 days to report, you could be held liable for the entire fraudulent transaction. So, depending on how much the fraudster has used your debit card, and how diligently you check your transaction history, your damages could be unlimited.

But there is one workaround: If you strongly prefer using a debit card, but want to achieve the same level of fraud protection as a credit card, select “credit” when you run the debit card. This requires the bank to follow credit card rules: Rather than being withdrawn from your bank account in real time, the purchase will go through the credit card network, and funds will be withdrawn within a few days. But the key distinction is that the transaction will be covered by the card company’s zero-liability policy, thereby exempting you of responsibility for unauthorized transactions.

When you want to earn rewards and have a good handle on your spending. Banks love to offer credit cards with cash back, points or other rewards, and it’s easy to see why. When rewards are connected to how often we use a credit card, we as consumers are incentivized to use them more often. The banks are essentially betting that, in our quest for more rewards, we will charge more to the card than we can pay off in one month, so they can charge us interest on the remaining balance.

That said, when used responsibly, rewards credit cards can save consumers a decent amount of money. If you want to use a credit card for this reason, make sure you never use the card for something you can’t afford in cash, and of course, pay off the balance in full every month. It’s also worth periodically doing the math to double check that your rewards exceed any annual fees associated with the card. If you’re paying the bank interest every month, or have sky-high annual fees, the credit card is not worth it, regardless of its rewards or other benefits.

Click here to read the second installment of Hallie’s two-part series, in which she discusses the benefits of using debit cards over credit cards and shares some helpful resources you can use to practice smart spending all-year-round.

Investing on Your Terms: How to Get Started

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If you’ve worked with an experienced advisor at The Humphreys Group, or stayed up-to-date with our communications and outreach, it’s clear the research we do and the personal interactions we have with each client are driven by a desire to dispel long-held – and wrongly-held – beliefs that men are overall better at investing and money matters than women.

We work with our clients to help them appreciate that their experiences – overseeing household finances, dealing with work budgets, participating in community projects – have made them savvier about money than they may realize. We point out that women often earn better investment results than their male counterparts. And we chalk up our clients’ successes to a variety of factors, including women’s tendencies to do more investment research and maintain longer-term perspectives on their financial plans than most men do.

It appears growing numbers of women are hearing similarly empowering messages, and increasingly beginning to learn, talk, write about and engage in investing behaviors worldwide. A recent article in The Guardian by Hilary Osborne highlights several books, podcasts, seminars and other resources where women who want to hone their investment skills can learn to do so. Another online resource makes it clear that maintaining a savings account without considering investing may not be a sufficient strategy for most women in the 21st century.

It may seem daunting to undertake an investment plan. Perhaps you are a woman who is new to investing — or maybe you are already an investor but have questions about your current strategy. In any case, we want you to know we are here to help. We consider the unique needs of each client to support her confidence and knowledge about investing, and the advice our experts offer is grounded in a few straightforward principles:

  • Focus on a short-list of investment principles and strategies that will work for you
  • Take time to learn about and curate your financial resources and investment plan(s)
  • Don’t get distracted by shifting investment trends and jargon

We already know pay gaps between women and men persist, and that many women leave the workforce earlier and live longer than men. Achieving financial equality in their lives remains an issue of interest and concern for many women. Contact The Humphreys Group to start a conversation about your investment journey. And if you haven’t done so already, remember to download a free copy of “Rewriting the Rules: Telling the Truth about Women and Money” to better understand the financial knowledge and smarts you already possess.

Summer Is Here: Put a New Focus on Self-Care

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The time will come
when, with elation
you will greet yourself arriving
at your own door, in your own mirror
and each will smile at the other’s welcome,

and say, sit here. Eat.
You will love again the stranger who was your self.
Give wine. Give bread. Give back your heart
to itself, to the stranger who has loved you

all your life, whom you ignored
for another, who knows you by heart.
Take down the love letters from the bookshelf,

the photographs, the desperate notes,
peel your own image from the mirror.
Sit. Feast on your life.

— Derek Walcott

Give Yourself a Mid-Year Wellness Checkup

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If you haven’t realized it yet, we at The Humphreys Group tend to view our glasses half full rather than half empty. So, as we arrive to the midpoint of another year, we want to celebrate where our clients are on their journeys toward growth and accomplishment, and to examine how they are using various resiliencies to fortify their busy lives. We accomplish this through a quick “wellness checkup.”

First, let’s review what we mean when we state that resiliency can help us meet our goals. We know Emotional resiliency is the ability to process and work through challenges that test one’s feelings, but we’ve also discussed other aspects of our lives where we can work to be stronger:

  • Physical: Take preventive steps to ensure you are resting well and breathing properly. Give yourself time to recover from illnesses and address other physical setbacks.
  • Spiritual: Stay true to the values, behaviors and beliefs that guide your efforts to live your most authentic life, professionally and personally.
  • Social: Spend time — in person or via other forms of interaction and communication — developing connections at home, at work and among your community; when challenges come your way, you’ll know who to call on for support.
  • Vocational: Set long-term goals for what you’d like to accomplish professionally, and take small, measurable steps toward them via your networks and relationships. Remember that not all progress has to come in dramatic leaps and bounds.
  • Financial: Work with an advisor to establish a long-term financial plan that grows and changes as your work and life evolve over time.

As part of your mid-year wellness checkup, we offer these additional questions to help you further assess your plan for bolstering resiliencies:

  • Remember that most journeys do not travel in a straight line — can you cut yourself slack so that you can continue to move forward?
  • How can you maintain a sense of optimism as you work to accomplish your goals in each area of your personal wellness?
  • Are you taking charge of your personal and professional stories so that you can speak and act in ways that reflect what you’ve learned and how you’ve grown?
  • Will you share what you’ve learned to demonstrate your resilience? Can your knowledge resonate with and encourage other people in your personal and professional circles on their journeys?

The calendar reminds us it’s time for a mid-year review of our goals and strategies. Let us be among the first to tell you we’re proud of what you’ve accomplished so far, no matter the size of your achievement or the scope of your effort. While our expertise lies in honing your financial resilience, we know you are working hard to make the most of every aspect of your life.

As always, contact The Humphreys Group to learn more about how you can improve your resiliencies and for help with developing a solid, long-term financial plan.