Money, as they say, makes the world go ‘round. Yet, for many of us, our relationship with money remains enigmatic and filled with unanswered questions. Are we saving enough? Is our current job serving our financial and personal aspirations? Are we truly on the path to financial freedom?
Asking the right questions can shine a light on our financial realities, providing a clearer roadmap to achieving our dreams and goals. In this guide, we delve into some pivotal financial advice questions that offer a holistic view of your financial journey.
Looking at Your Financial Strategy
How much money should I be investing?
Deciding on the amount to invest should be based on your financial goals, risk tolerance, and current financial situation. A common recommendation is to invest at least 15% of your income towards retirement. However, this percentage can (and often should) vary. For instance, younger individuals or those with a higher income bracket might choose to invest more aggressively.
Conversely, those nearing retirement or at a different compensation level may choose a lower-risk approach. Assessing your unique circumstances and consulting with a financial advisor can offer clarity on the best strategies and investment products for you.
Do I need to update my budget?
Budgets should be living, breathing tools that adjust as your life and goals evolve. If you’ve experienced significant life changes recently, like marriage, having a child, or changing jobs, it’s a signal to revisit your budget. Whatever stage of life you’re at, it’s also good practice to review your budget monthly (or even weekly) to ensure it aligns with your current income and expenses.
Am I on track for retirement?
To know if you’re on track for retirement, you need determine what your desired retirement looks like. What lifestyle do you envision? What will your expenses be? How much do you anticipate receiving from Social Security or pensions? Periodic consultations with a financial planner can give you a more precise projection and insight into whether you’re retirement plan fits your needs, wishes, and stage of life.
Reflecting on Your Values & Choices
Are my life and financial values aligned?
Your finances should be a reflection of what you value most in life. If you prioritize travel, for instance, but find yourself spending on material objects, you may need to rethink your habits and priorities. Periodic reflection can help you ensure you’re channeling your money in a direction that aligns with your core values.
Am I happy with my current job?
Is your job providing enough income to support your financial goals? If not, it may be time to consider asking for a raise or searching for a new job. In other cases, your job might provide sufficient income but fail to offer personal fulfillment. Again, it might be worth reevaluating your career choices. A job that aligns with your passions can make the journey towards financial stability all the more gratifying.
How do my emotions influence my financial decisions?
Money is often closely tied to our emotions. Perhaps the rush and excitement of a sale prompt unnecessary spending, or financial stress leads to poor investment choices. By understanding how our emotions drive our financial behaviors, we can take steps to make more balanced, rational decisions. Engaging with financial advisors can be especially beneficial in this context. Their objective perspective and expertise provide a buffer against emotionally driven decisions, guiding you towards choices that best serve your long-term financial goals.
What financial habits do I have that I’m unaware of?
You might be amazed at the habits you’ve developed without realizing it. Maybe it’s the daily coffee purchase or impulsive online shopping. While some habits may be benign or even beneficial, others might be draining your wallet. Reflect on these patterns and determine which ones serve your financial goals.
Gaining External Insight
Am I actively seeking to improve my financial literacy?
Financial literacy isn’t innate; it’s learned. Are you investing time to educate yourself about budgeting, investing, and other financial topics? In a world brimming with resources, from books to online courses, the tools are at your fingertips.
Am I proactive in seeking advice or mentorship for my finances?
Even the most financially savvy among us can benefit from a fresh perspective. Do you actively reach out to financial experts or mentors? Whether it’s for investment strategies, tax planning, debt management, or anything in between, external insight can be invaluable.
Don’t leave your financial questions unanswered. At Ironwood Wealth Management, we’re here to guide you through every financial challenge with expert advice and personalized financial planning solutions.
