Fear is a great motivator. If you’re standing on a ledge about to bungee jump off a bridge, it’s a good assumption that most of us would be fearful for our lives. There’s always a contingent of society who welcome the risk and danger with open arms. They jump head first into the fray without considering the consequences.
Head first may work when you’re overcoming a fear of heights, it’s not as useful when it comes to your money.
Running out of money for a child’s college savings or to fund your retirement can cause many sleepless nights. The fear you have for what’s ahead can be a driver to ensure you’re adequately prepared and are ready to tackle what’s ahead.
Here are 3 ways to overcome your fears and sleep better at night.
Utilize the Expertise of a Financial Advisor
Money is extremely complicated. From stocks and bonds to annuities and REITs, there are any number of products that can be both advantageous and extremely confusing if you research them on your own. Using a financial advisor to sift through the details and legal jargon while providing you with advice on your specific situation can be very helpful.
Personally, I was hesitant to use an advisor. I had managed our overall budget for years and didn’t see the benefit of having someone else in charge of our money. I couldn’t have been more wrong. Rather than having multiple separate accounts, our advisor was able to consolidate our money and provide a long term view of what we needed to reach our retirement goals. It was sobering to see the perception of how I thought we were doing versus the reality. This has helped us to charter a different course, placing additional focus on savings and long term planning.
Open a 529 Plan
The cost of attending a 4 year university has exploded over the past twenty five years. On average in the U.S, the total cost to attend a 4 year in-state public university is $26K per year. One year to attend an in-state college costs more than my entire 4 year degree. That’s a 74% increase from when I graduated twenty five plus years ago.
Although the cost to attend a college has leveled out post Covid, years of inflated costs continue to be felt by parents and prospective students. Having a plan to tackle this enormous expense is not only needed, it’s necessary. A 529 plan may be a great option for you and your family. The money placed into a 529 plan is invested on your behalf (i.e. stocks, bonds, mutual funds, etc). The earnings grow tax free and you can also withdraw the funds tax-free for qualified educational expenses.
Consider Life Insurance
Whole life, term life, annuities. Do you know the difference and advantages of one versus the other? Are you well versed enough to decide which option is best for you and your family? The chances are probably slim that you’ve had enough down time to research all the different options and which one is the most cost effective while providing the greatest benefit upon death, injury and retirement.
Insurance can be very complex. Similar to a financial advisor, having an insurance agent sift through the minutia to identify the right option(s) can be both helpful and a huge time savings. Thinking about dying or becoming injured is never a fun exercise. Losing your life savings because you don’t have the appropriate coverage or leaving your family in debt is also not pleasant.
The key is hiring a financial advisor first and then figuring out the best path forward to reach your individual goals.
As far as bungee jumping goes, you have fun with that. That’s one fear no amount of planning could help me overcome.
Sign up for our Sunday Spectator. Delivered to your inbox every Sunday, with all the news from the week.
