Do you have some amazing things in your closet that you are always going to have no matter what? Having the key pieces to a sound financial plan in place is much like having those key pieces of clothing in your closet.
The Yoga Pants: Probably the most comfortable and flexible item in your closet. Your yoga pants are much like a Savings Account. It makes you feel comfortable to know it’s there an it provides you a little flexibility when you need to dip into it for a need or want that may arise. What woman doesn’t like a comfortable and flexible pair of yoga pants?
Your Favorite Jeans: My “stretchy jeans” are what I like to call them. That is exactly what your Emergency Fund can do for you. An emergency Fund is important because of the security that it will provide you in times of unforeseeable crisis such as job loss. You should have 6 months to a years living expenses in an emergency fund. You can always rely on those favorite jeans when all else fails to work. With an emergency fund in place you can rely on it to get you through that tough time.
That Classic Vintage Piece: We all have that time-less piece we keep around because no matter how old it is it never seems to go out of style and just gets better with age. So does your IRA (Individual Retirement Account)! Your IRA just gets better with age because over time your assets have the potential to grow and there is nothing better than the time value of money when it comes to your IRA. The earlier you start the more potential it has to get better with age (due to regular contributions and potential growth).
Grandma’s Pearls: The jewelry you’ve inherited that means so much to you is exactly why you need a WILL. If you don’t have a will stop what you are doing right now and get one! Well, finish reading this first then go get one. Even if you think you have nothing to leave, and especially if you have children, wills are vitally important because issues such as guardianship of your minor children are directed in your will. Make sure that the person you wish to have your assets gets them. There is a good chance this won’t happen without a will.
Tennis Shoes: I love my tennis shoes because they keep me in shape! Tennis shoes are the Tax Professional in your life. Having a tax professional that you can depend on to steer you in the right direction when it comes to issues such income tax and business planning is crucial. Not only will they keep you out of trouble with the IRS, they are most helpful in making critical decisions that may affect your tax rate. A good tax professional will keep this aspect of your financial position in shape if you let them.
The Life Vest: Okay. We may not have these in our closets but everyone needs one. Your life vest is your Life Insurance. Most everyone needs at a minimum term life insurance. I am even speaking to the stay at home moms of the world as well. How would your husband finance someone to replace you and all of the amazing things you do? That can get very expensive!
A Classic Blazer: This is your Financial Plan. Just like that blazer will complete your look and totally pull that outfit together, your financial plan does just that for you. All the pieces are there but a sound plan will hold them together and complete your financial outlook.
Clothing is to your body what a financial plan is to your financial health. Get a financial plan!
Any opinions are those of Gainspoletti Financial Services and not necessarily those of Raymond James. We do not, however, practice as lawyers or CPAs and cannot give specific legal or tax advice. You should always consult with your tax advisor, or your attorney, when making complicated legal or tax decisions, however, we’re glad to work with your tax or legal professional to help you meet your financial goals. Raymond James financial advisors do not render advice on tax or legal matters.