Tag: women

Financial Wellness: What it is and how to achieve it

Published in: Resources |

“Wellness” is a word that you probably hear tossed around a lot these days, especially following the pandemic. Emotional wellness, physical wellness, mental wellness… and even financial wellness. But while the other types of wellness may be slightly more self-explanatory, financial wellness is a bit less clear.

So, what exactly does it mean?

At its most basic, financial wellness means being able to efficiently and effectively manage a healthy and balanced economic life, resulting in a state of overall financial wellbeing. Despite being rather simple in concept, financial wellness encompasses a wide variety of factors, from living within your means to being debt-free.

One important thing to remember as you set out to create a sense of financial wellness in your life is that it is a journey, not a destination. There is no one set end goal that you will be able to conquer once and for all. Rather it is about creating and sticking to smart financial habits that will keep you consistently financially stable.

Here are our top 10 tips for achieving ongoing financial wellness in your life.

  1. Be aware of your financial situation and keep track of how much money you have, any debt you have, various accounts in your name, your income and expenses, etc.
  2. Live within your means.
  3. Use a budget to stay on track.
  4. Build an emergency fund.
  5. Build your savings.
  6. Start thinking about retirement early one. Take advantage of company sponsored retirement plans, or do your due diligence and open a retirement account up for yourself.
  7. Use credit wisely. Don’t overuse it, pay your balances on time and in full, and avoid falling into debt. Also, be aware of your credit score by checking it annually.
  8. Many banks offer free services such as high balance alerts, high transaction alerts, and withdrawal alerts, in addition to overdraft protection. Take advantage of these services if you have the option.
  9. Keep financial records.
  10. Set financial goals and work towards reaching them.

Bonus tip. Ask for advice, but also listen to your gut. We’ve said it before, and we’ll say it again: At The Humphreys Group, we believe that expertise and empathy both have their own unique role to play in financial matters. While most financial advisors will tell you that emotions and investing are two things best kept in isolation from one another, we believe that anyone who focuses on one at the expense of the other is presenting an incomplete picture.

Over the years, we have seen a domino effect when clients allow their feeling to play a role in their finances: self-reflection leads to self-knowledge, which leads to self-confidence, which leads to better decisions and timely implementation. We maintain our belief that financial life planning is a holistic process, and that when your money and your emotions are in harmony, you are well on the path to creating lasting financial wellness.

At the Humphreys Group, we partner with our clients to help them live purposeful lives. Through our discovery process, we learn about you, your dreams and aspirations in order to provide our best advice and develop a financial plan that will support your overall financial wellness. Reach out to our team to continue the conversation.

 

Build Smart Money Habits to Beat Debt

Published in: Resources |

Picture this: You went to college, you got the degree, you landed the job with the office, and things are going pretty well…you’re successfully “adulting.”

As you begin to feel at home in the professional world, (Hello, 401K! How you doin’, title change?) it’s important to check in with your finances. Are you living paycheck to paycheck? Are you funneling money into a savings account and hitting your financial goals? As your career picks up (and hopefully your paycheck does, too) it’s important to make sure that you maintain and solidify smart money habits, stay on top of your bills, and avoid unnecessary debt (we’re looking at you, Alaskan Cruise.)

Here are our 4 top tips to build smart money habits and, in turn, combat debt.

1. Know where you stand

If you’ve browsed our blogs, you know we’re advocates of creating and abiding by a budget, however, you can’t create an accurate budget without first understanding your financial situation. Take an inventory of your finances – both assets (what you own) and liabilities (what you owe) – to determine your net worth.

2. Create a budget

Next, (you guessed it) it’s time to create a budget. Learning to budget is a critical skill that will only help you as you grow your wealth. Now that you’ve taken an inventory of your finances and have a better understanding of where you stand, take a closer look at your month-to-month financial picture.

Start with your income. When taking your income into account, make sure to deduct Social Security, retirement, taxes, etc., so that you have an accurate picture of what your net income actually looks like.

Next, make a list of any fixed expenses (like rent, mortgage payments, and insurance) and variable expenses (like entertainment, food, and gas) to contrast how much money you’re bringing in, versus how much you’re spending.

Now it’s time to think about your financial goals. After your expenses, do you have enough leftover money to meet your goals? Maybe you’re saving up to make a down payment on a house, but you notice that you’re spending an enormous amount of your income on rent. Could you move into a less expensive apartment while you save? Each person’s financial goals are unique to them, so adjusting your budget might require some introspection.

3. Pay yourself first

Piggy-backing off of tip #2, an excellent way to train yourself to adhere to a budget is by “paying yourself first,” which essentially just means taking a set amount or a percentage off the top of each paycheck, putting it into a separate account, and not touching it.

With the remainder of your money, you can spend it as you please…paying bills and rent, buying groceries, subscribing to Netflix, getting a massage…even going on that Alaskan cruise if you can afford it.

When you set aside funds as soon as you receive them, you not only ensure that some money makes its way into your savings account, but you’re also forced to budget with what’s left.

Bonus tip: If you’re working to pay off debt, you can set up a similar system by automatically putting a set amount of each paycheck towards bills.

4. Live within your means

While this might seem obvious, it’s incredible how many people ignore this tip, taking out additional lines of credit to lead lavish lifestyles that might earn them “likes” but will cost them dearly in the long run. In the heyday of social media and over-sharing, it can be easy to feel like you’re the only one who isn’t going on your third international trip of the year, or who doesn’t have a rooftop pool with a skyline view, or even simply who doesn’t go out to a trendy restaurant three nights a week.

But let us fill you in on a little secret. Living above your means will only stunt your growth when it comes to building wealth. Live in the apartment you can afford when you’re 25, and maybe by the time you’re 35, the dream apartment you said no to will actually fit within your budget. Are your credit card bills stacking up? Turn down that destination wedding and put the money you would have spent towards those bills. Smart habits set you up for lifelong success and stability. And who doesn’t want to feel secure in their finances?

At the Humphreys Group, we partner with our clients to help them create the life they want, but we will be the first to tell you that sometimes it takes time and patience to build. Are you ready to grab the hammer and nails? Reach out to our team.

The Importance of Giving Back

Published in: Resources |

“The best way to find yourself is to lose yourself in the service of others.” — Mahatma Gandhi

You probably have noticed that service is very important to us at The Humphreys Group. From donating time to talent, giving back benefits us personally, as well as our communities as a whole.

Here are five key reasons to give back.

To make a positive impact

When you give back, whether it be through time, resources, or money, you’re making a positive impact, not only on the lives of individuals – yourself included – but also on the community as a whole. From donating your time cleaning up trash on Sunday mornings, to passing out meals at a local homeless shelter, making a positive impact on your community will help to strengthen it, ensuring that those who live there are able to maintain healthier and safer lives.

To share your skills

Are you especially good at math? Why not take the time to tutor math students at the local high school? Are you considering nursing school at some point? Maybe volunteering at a low-income health center could be a good fit. At The Humphreys Group, we share our skills by providing pro bono financial planning services to several Bay Area organizations, including Shalom Bayit, La Casa de Las Madres, and San Francisco Safe House. We also participate in San Francisco Financial Planning Days, which provide an opportunity for those with financial planning concerns who haven’t had the means or opportunity to consult a professional and ask questions. Whatever your skills include, sharing them with others is a great option when it comes to giving back.

To learn new skills

Additionally, giving back can be an excellent way to learn new skills. If you’ve been itching to improve your cooking, volunteering at a meal kitchen might be a great way to learn. Do you want to bulk up your resume with some marketing experience? Perhaps you should volunteer to do social media for a local non-profit. Learning a skill while simultaneously donating your time and giving back is the ultimate win-win scenario.

For your health, both mental and physical

Did you know that the act of giving actually brings up what some people call the helper’s high? When you give to others, it activates your brain’s reward center, which is responsible for releasing endorphins and making you feel happy. Additionally, getting involved in community activity gets you moving, which has an extremely positive effect on your physical wellbeing. While volunteering at an animal shelter or a soup kitchen feels like a far cry from running a marathon, the act of getting out, moving your body, and giving back can have a very positive impact on your overall health

To meet people

Whether you’ve just moved to a new neighborhood and are looking to meet people, or you’re looking to expand your network outside of your regular circle or friends, volunteering can be a great way to meet others with similar interests.

Ultimately, it’s not about what you do to give back, but rather that you do it at all. How do you give back? Learn more about what The Humphreys Group does here.

 

Tips for Negotiating Your Salary and Advocating for Yourself

Published in: Resources |

We know, we know. Negotiating your salary can be intimidating. Between the nerves and the feelings of imposter-syndrome, it’s not uncommon for people who want (and probably deserve) raises to avoid asking for them. According to a survey, 59% of American workers said they get apprehensive when it comes to negotiating their salary, with an overwhelming 43% noting a fear of rejection.

Unfortunately, despite this fear, it’s important and even necessary to learn to advocate for yourself and ask for what you deserve. It’s unlikely that anyone is going to hand over a raise that you didn’t ask for, so sit back and take notes on how you can prepare for salary negotiations.

  1. Collect your thoughts 

A powerful first step in preparing to ask for a raise is taking the time to organize your thoughts and think through what you plan to say. Something as important as asking your employer for more money shouldn’t be based on impulse. Write down what you hope to accomplish during your meeting with your employer, what questions you’ll ask, and your responses to tentative questions that might be asked of you. You could even rehearse in a mirror or with a friend or family member to feel extra prepared.

  1. Know your worth

Knowing and understanding your worth is important for two main reasons. Number one, it’s crucial to know precisely what value your work brings to your company so that you are better able to negotiate. Look at sites such as Glassdoor to gain a good understanding of what other professionals with similar responsibilities are making. Secondly, it’s important to understand that you and your talents are worthy of fair compensation. Don’t undersell yourself.

  1. Be willing to walk away

It can be really difficult to walk away from a job, especially coming off of a year like 2020, but it’s imperative to value yourself, your work and your time enough to draw the line if an offer is too low. You can decide that number for yourself, and it can be based on anything from market value to the level of your financial need, but have it in the back of your mind before you go into discussions.

  1. Have a specific number in mind

On the flip side, you should also go into your meeting with a specific number in mind of how much you will ask for. When deciding on a number, you should ask for more than you actually want or expect so that you have some room to negotiate. Additionally, you should avoid mentioning a range. For example, if you say something along the lines of, “I’m looking for between 70K and 80K,” your boss or the hiring manager will immediately go for the lower number, as you’ve just set yourself up to settle. A final tip is to ask for a very specific number, for example, $76,500. According to a study, “precise numerical expressions imply a greater level of knowledge than round expressions and are therefore assumed by recipients to be more informative of the true value of the good being negotiated.” In other words, you’re more likely to look like you know what you’re talking about and you’ve done your research.

  1. Mention market value

It’s important that, before asking for a raise or beginning to negotiate your salary, you do your due diligence and take some time to research the market value of your position. How much are other people in your field, position and location making? Look at your experience, skills, designations and certifications, education level, geographical location, etc., to help determine you value, and ultimately, your specific ask number.

  1. Plan your timing

When asking for a raise, be thoughtful about when you will bring it up to your boss. Instead of waiting for performance review time like most people, consider bringing it up earlier. Not only will they then have it in their mind prior to a performance review, but they’ll also realize that you mean business.

  1. Stay strong and be confident

Attitude is everything. Going back to tip #2, know your value and don’t underestimate your worth. Go into your meeting feeling prepared and strong. Carry yourself with confidence, hold your head high, smile and channel positivity as you begin negotiations.

Are you considering asking for a raise? Is the anxiety of rejection holding you back? At The Humphreys Group, we understand how difficult it can be to advocate for yourself, but know that we’re rooting for you. If you’d like to continue the conversation about fair compensation, reach out to our team.

 

 

Planning for Retirement as a Single Woman

Published in: Resources |

In past blogs, articles and social media posts alike, we’ve touched time and time again on the disadvantages faced by women when it comes to their finances. From unequal pay, to the “pink tax,” the scale has been historically tipped against females.

One particular disadvantage for women is retirement. Between their typically longer lifespans and typically smaller salaries, women have not been set up to succeed in their golden years. Whether you’re widowed, divorced, separated, or just single, planning for retirement is even more of an uphill battle for single women, making it absolutely critical to plan for this time period well in advance.

Here are 3 important steps to plan for retirement as a single woman.

  1. Create a rainy day fund

If you’ve been single for a long time or have never had a partner, you are probably used to relying on only one income. If you’re recently divorced or widowed, on the other hand, going from two incomes to one can be quite challenging. It can also be stressful, as you no longer have that extra income as a safety net to fall back on during times of hardship or illness. In fact, according to a 2016 Northwestern Mutual study, financial anxiety runs higher among single women (50%) than married women (41%). Ensuring that you have a rainy day fund in place can help to alleviate some of that stress. Try to keep at least a year’s worth of living expenses in a savings account, and as you near retirement age, bulk that amount up as much as possible. It’s also wise to look into disability insurance, so that in the event that you are out of work for a long time, you don’t have to sell off investments or deplete your retirement savings.

  1. Make a plan

It’s absolutely crucial to plan ahead when it comes to retirement, as the longer you have to save, the better off you’re likely to be. It’s particularly important for women to get ahead on their retirement planning, as they generally are paid less than their male counterparts. Additionally, women tend to live longer than men, so they should plan to save up for a longer retirement period. When putting together a retirement plan, be sure to consider the age you plan to retire, the cost of healthcare, where you will live, how much money you’ll need annually for any necessities, when you’ll start claiming Social Security, etc. By putting a plan in place early on, you have more time to look at the big picture and fill any gaps.

  1. Assemble a team

Growing old as a single woman means that you’ll want to take into consideration who will care for you as you age. Do you have adult children? Extended family? Trusted close friends? If you’re incapacitated, who will assist you with medical decisions, finances, appointments, and errands? Take the time to have honest and open conversations with anyone you are considering entrusting with your wellbeing. In addition to friends and family, make sure that you have an elder-law or estate-planning attorney, and possibly a geriatric care manager to assist with all things medical. Finally, be sure to enlist a certified financial planner to look at your comprehensive financial situation and help guide you as needed.

At The Humphreys Group, we welcome your unique financial challenges and are deeply committed to providing you with a comfortable, collaborative setting to explore your concerns. By listening to you, we seek to understand your goals and priorities, as well as what keeps you up at night. Our planning process has a single purpose: to manage your wealth so that you may live fully and confidently, especially during your golden years. Reach out for more information.

 

 

How to Live Your Values

Published in: Resources |

At The Humphreys Group, we talk a lot about values, and encourage our clients and community members to live their values each and every day. But what does that really mean? What exactly are core values, and how does one “live them”?

At their most basic, core values can be defined as principles, qualities or energies that make you feel fulfilled. There is no one specific set of values that each individual should have; your guiding values are as unique to you as your favorite band or your favorite smoothie recipe.

Although we may not all share the same set of values, one thing we do have in common is that when we live our values, we are much more likely to feel aligned, fulfilled and at peace with ourselves. That’s why it’s extremely important to understand what your core values are, and orient your daily life around them.

Discovering your values means you’ll need to get introspective and do a little bit of soul-searching. Start by grabbing a pen and paper and taking the time to contemplate a few questions.

  1. Have you ever experienced a moment so fulfilling that you felt more like you than you ever had before? What have been some of those moments? Maybe one was when you found out you were pregnant. Perhaps one was the day you graduated from law school. Or maybe, one was a random Tuesday afternoon when you went out to lunch with a friend and had an amazing conversation. Try not to choose moments based on society’s narrative, but rather consider any occasions where you felt like the most authentic version of yourself.
  2. Now that you have a few of these ultra-fulfilling moments jotted down, reflect on why these experiences were so fulfilling, rich and meaningful for you. Look at these moment through a value based lens. If one of your peak moments was taking a vacation with your significant other, maybe that signifies that a core value for you is adventure, or maybe partnership. If you cherish the memory of a conversation with a loved one, maybe you value communication and connectivity.
  3. Once you have begun to think deeply about what you value, try to compile a list of at least 3 core values that you’d like to incorporate more into your day-to-day life, and brainstorm ways you can express these values through your daily actions. For example, if your values are service, leadership, and creativity, maybe you volunteer for a leadership position at your local community center. Perhaps you organize a team wine and paint night at work. Or maybe you organize a compost program in your apartment building.
  4. After you’ve come up with a list of values and brainstormed ways to incorporate them into your daily life, be sure to continue to check in with yourself. Keep a journal and assess your progress. Track how these subtle but actionable shifts are making you feel.

At The Humphreys Group, we know that living your values feels fulfilling because we practice living our values each day. We value our community, our clients, and the environment, and by becoming a B Corp, we have shown our public that we’re not just talking the talk — we’re walking the walk.

If you’re interested in learning more about the B Corp certification and how it impacts The Humphreys Group, get in touch today!

 

Money Tips for New Parents

Published in: Resources |

Becoming a parent is an undeniably exciting time. It’s also an undeniably expensive one. From car seats and diapers, to baby food and childcare, the list of expenses seems never-ending. However, just like any large financial commitment, a little planning can go a long way. Here are some key considerations and planning tips for new or expecting parents.

Budget, budget, budget 

We don’t mean to sound like a broken record, but we can’t stress the importance of budgeting enough, especially when the financial commitment is as expensive and longterm as a child. First, come up with a list of all the new expenses you will be responsible for between now and the time your child is an adult. While you don’t need to have college tuition saved up by the time your little one is walking, it certainly helps to consider longterm costs early on. Try breaking expenses down annually. The first year, you might factor in medical bills, a crib, a diaper stash, a breast pump, and baby clothes, among other things. The second year, your budget might cut down on the medical bills, but tack on childcare. By year 10, maybe you’re thinking about back-to-school clothes, after-school soccer, and art classes. Again, you don’t need to panic if you don’t have the extra money lying around to pay for year 10 expenses at the time of birth, but thinking about them early on and planning accordingly can make a massive impact on your preparedness when the time eventually does come.

Once you’ve thought through the costs associated with your child, start comparing the annual budget to your existing budget. Chances are you’re going to be spending significantly more money now that you have an additional human in your care, and it’s likely that you’ll need to make adjustments elsewhere in your budget to compensate for the new spending. Maybe it’s time to stop coloring your hair each month, or maybe it means packing a lunch instead of eating out every day. Whatever your new budget looks like, it’s important to be prepared to face your evolving financial reality.

Build up your rainy day fund

If the pandemic taught us anything, it’s that a rainy day fund is a necessity. Emergencies can and do happen, and it’s always better to be overprepared than underprepared. While the thought of losing your job or getting sick and not being able to support yourself is always nerve-wracking, it’s especially daunting when you have children who rely on you. Aim to put 6-12 months of living expenses into an emergency fund as a comfortable cushion to fall back on in a time of need.

Add your child to your insurance policy

For most health insurance plans, you will have between 30 and 60 days from the date of birth or finalized adoption to add your new child to your health insurance policy. It’s worth doing a little research into various policies and premiums as you consider your new situation. In some cases, it might be worth jumping up to the next level of coverage and paying a higher premium, as you’ll likely be visiting the doctor more frequently with a little one on your hands. In two-parent dual-income households, it might be more cost-effective to keep one parent on a solo coverage plan, while adding children to the other parent’s “employee with children” plan. In any case, doing your due diligence and taking the time to compare your options can end up saving you money.

Start a college fund

The longer you save, the more money you’re likely to have when it’s time for your kid(s) to pursue higher education. State-sponsored 529 plans are ideal, as they allow students to make tax-free withdrawals for tuition and other relevant expenses, as well as offer financial aid advantages. Most 529 plans offer automatic investment options, where money is transferred from your bank account to the 529 plan, and some even offer contributions through payroll deduction. Additionally, some states offer parents tax breaks on their contributions to 529 accounts.

The Humphreys Group can help

There is a lot to consider when you’re a new or soon-to-be-new parent, and we understand that while it’s exciting, it’s likely a little stressful, too. If you’d like a second set of eyes on your financial plan as you begin to factor in your new family, consider scheduling a free consultation with a member of our team.

 

How to Establish Good Credit

Published in: Resources |

Let’s discuss the mythical credit score… There are countless rumors floating around in the ether about credit scores, from ‘don’t check your score, it will negatively impact your credit,’ to ‘married couples have a joint credit score,’ to ‘the better your job, the better your score!’ While a sizable chunk of the information we read online or hear from our colleagues regarding credit scores can (and should) be disregarded, there is no denying that your credit score is an important number with serious implications.

To start with, let’s break down how credit scores are calculated. According to FICO, there are five key factors that are considered to determine a credit score.

  1. Payment history (35%): Have you paid off your credit card balances, and were the payments made on time?
  2. Amounts owed (30%):  Your credit utilization rate — what percentage of your credit limit are you using?
  3. Length of credit history (15%): How long have you had credit? This includes any and all lines of credit you have had over the course of your life.
  4. Credit mix (10%): Do you have a variety of credit products? This could include credit cards, mortgage loans, installment loans, finance company accounts, etc.
  5. New credit (10%): How often do you apply for new lines of credit or open new accounts?

Now that you’re familiar with the key factors that determine a credit score, we’ll walk through three steps you can take immediately to get your credit score on the right track — and bust some credit myths while we’re at it.

  1. Pay down your balance

Pay your credit card bill on time, and pay it in full. This may seem like a no-brainer, but seeing as 35% of your overall score is based on your payment history, we can’t stress enough how important it is. Did you know that not only do creditors look at how much you owe, but they also look at how much you owe in comparison to how much credit you have available? Try to keep this rate, known as your credit utilization rate, under 30%. That is to say, if your credit limit is $10,000, you should never have more than $3,000 charged at a time.

  1. Increase your credit limit

Piggy backing off of tip #1, the larger your credit limit, the easier it should be to keep your credit utilization rate below 30%. If you’re frequently charging over 30% of your limit to your credit card, consider asking for a credit increase. It’s critical to remember, though, just because you have a higher limit does not mean you should start spending more.

  1. Open a new account

Contrary to the belief of some, having multiple lines of credit can be a positive thing. For instance, if you wish to increase your credit limit, but your credit card issuer declines to grant additional credit, applying for a new card through a different issuer will still get you to that higher overall credit limit. As your utilization rate is based on all your open lines of credit and balances rather than on each individual credit card, you could still succeed in lowering your overall utilization rate. Do keep in mind though that if you plan to open additional lines of credit, they should be spaced out. Opening too many new accounts at once can negatively impact your score.

Remember, credit is a tool, and it’s meant to be used. Don’t be afraid of credit, be smart about it! If you’re displeased with your credit score, remember that there are ways to boost it, it just takes a little time, patience, strategy, and willpower. If you have questions about your credit rating, reach out to our team!

 

Teaching Your Kids about Personal Finance

Published in: Resources |
As parents, we all want what is best for our children, and that involves setting them up with a strong foundation and the proper tools to succeed on their own. Part of this foundation includes teaching them financial stability and making sure that they understand the value of money, as well as how to handle their personal finances. Here are some key ways to ensure that your children, no matter their age, are set up to succeed when it comes to money.
Lead by example
Your children are always watching, so it’s critical to set a good example. Be mindful of the little things, like how often you pay with a credit card or the impulse purchases you make. Chances are, your children will follow your example and develop habits based off of your actions.
Forget allowance – try commission
Instead of just forking over cash each week as an allowance, why not teach your children the value of working for their money? Come up with a list of household chores, like doing laundry, mowing the lawn, or taking out the garbage, and pay them based on the tasks they complete. This will help them to understand that money is not given, it’s earned.
Teach them how to budget
Paying your children a commission-based allowance that corresponds to the chores they complete is also a fantastic way to introduce them to budgeting. Sit them down and explain that the money they earn from their allowance will be the only money they get. That means that if they want to go to the movies with their friends, buy a new video game, and pick out a dress for the upcoming homecoming dance, they will need to plan accordingly and budget based on their priorities.
Save, save, save
It’s important to teach kids that money is not just for spending, it’s for saving. While it will likely be difficult to teach young children the concept of saving for the future, starting small is still a step in the right direction. For example, if your young child asks for a toy, sit them down and explain that they can save up for it. As they get older, the prize will likely get bigger and bigger, from a bike, to a spring break trip, to college tuition, and beyond. 
Highlight the importance of giving back
Almost as important as teaching your kids the importance of saving is teaching them the importance of giving. A great way to introduce the concept is by matching their allowance. For every dollar they earn, set aside a dollar for them to give to charity. Once they have a decent sum of money saved up, sit down together and choose a charitable organization to donate the money to.
Teach them the ABCs of finance – credit cards, debt, loans, etc.
School prepares our children to take on the world, but unfortunately, many young adults graduate high school still not fully understanding the world of finance. They may learn compound interest in math class, or how to calculate a tip for a waiter, but understanding debt, credit, loans, etc., is a whole different ball game. Be sure to explain the difference between a debit card and a credit card. Point out the dangers of taking on too much debt, as well as the difference between good and bad debt. Teach them about loans, including the interest you commit to when you take out a loan. Knowledge is power, so set your kids up to be powerful.
At The Humphreys Group, we understand that you’re leading by example. Educating your children about personal finance is not something that happens overnight, but if you chip away at it little by little, you will set your children up with strong habits that will serve them long into the future. Want to continue the conversation about instilling positive financial habits and leading by example when it comes to money? Reach out to our team today.

 

How To Combat Financial Procrastination

Published in: Resources |

Have you ever wondered to yourself why it is that you procrastinate on important or difficult tasks? One would think that we’d want to get these unpleasant sources of anxiety out of the way, yet we have a tendency to hold off on them until the eleventh hour. Luckily, according to a New York Times article, procrastination isn’t necessarily a sign that we are lazy or have limited self-control, but rather “it may be due to something inherently unpleasant about the task itself… [or] from deeper feelings related to the task, such as self-doubt, low self-esteem, anxiety or insecurity.”

By this logic, it makes sense that when it comes to finances, people commonly hold off until the last minute to take care of business. But it doesn’t have to be that way. Here are some tips to stop procrastinating on difficult money questions.

     1. Just get started

The toughest part of tackling any task is oftentimes just finding the motivation to get started. Take writing an essay. Was there ever a time in college when you put a paper off until the last minute? It’s likely that this was due, in part, to the impending anxiety you felt when you thought about this project. Once you finally took 5-10 minutes to sit down and brainstorm an outline, however, you probably felt significantly better about your progress, didn’t you? Just ripping off the bandaid and getting started on a project is sometimes all it takes to get the wheels rolling. Your finances are no different. Most of us dread looking at our credit card bill, double checking the charges, and making the necessary payments, but as soon as we take the first step and open the envelope, one of the hardest parts—the anxiety of getting started—is behind us.

     2. You probably won’t feel any more ready tomorrow than you do today

How many times have you stared at the overflowing laundry basket and thought, “I’ll do it tomorrow,” only for tomorrow to come, and the cycle to repeat itself? When it comes to procrastinating on money-related tasks, odds are that you’re putting them off as a coping mechanism so that you won’t have to confront potentially stressful financial realities head on, but putting them off will likely just make them worse. As the saying goes, why put off until tomorrow what you can do today? You’ll thank yourself tomorrow.

     3. Break your goals into manageable chunks

Another reason we sometimes procrastinate is because we bite off more than we can chew by setting goals that are too big. More often than not, these big goals are accompanied by even bigger anxiety, as it can be stressful to know where to even begin on your journey to achieving them. That isn’t to say you shouldn’t set big goals, however. It just means that there is a better approach. Say you want to plan for retirement. “Plan for retirement” is a smart goal, but in order to achieve it, you need to set yourself up with attainable actionable steps. For example, one goal under the “plan for retirement” umbrella could be to talk with your employer about your company’s 401K. Another could be to set aside $50 from each paycheck in a separate savings account. Smaller, more attainable goals are less intimidating than a single large goal. And yet, if you combine a few smaller goals, ultimately you’ll end up reaching that large goal after all.

One thing we can probably all agree on is that procrastination doesn’t feel good. We’re not all sitting around trying to procrastinate, but sometimes we just don’t know how to get out of the rut or over the hump. At The Humphreys Group, we’re here to help you end financial procrastination. If you’re interested in working with a financial advisor to set your financial plans in motion today, schedule a complimentary introductory call with us. Together, we can forge a path to reach your financial goals.