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Giving Tuesday: The Power of Charitable Giving

One of the greatest parts of the holiday season is giving. Giving Tuesday, a global generosity movement, takes place on the Tuesday after Thanksgiving each year.

What is Giving Tuesday?

Giving Tuesday began in 2012 as a simple idea: a day dedicated to encouraging people to do good. Since then it has grown into a movement meant to unleash the power of people and organizations to transform their communities and the world at large. It demonstrates the power of philanthropy and collective action, inspiring hundreds of millions of people a year to give, collaborate, and overall celebrate generosity. 

How to Get Involved

Everyone can participate in Giving Tuesday and there are various ways to contribute. The first step to getting involved is choosing a cause that resonates with you and your values. Research the organization of your choice to ensure your contributions go somewhere reputable. After choosing your cause, there are many ways to give. Monetary donations are a common method, but you may also consider donating your time, skills, or other goods when appropriate. You can also participate in local fundraisers, community drives, or events.

Charitable giving is not limited to individuals – it can be embraced by businesses and organizations as well. Ask your employer about a matching program for employee donations, a team volunteer day, donating a portion of sales, or even donating products. Engaging in those activities will boost your organization’s corporate social responsibility while creating a significant positive impact on your community. 

The Impact of Charitable Giving

Charitable giving is vital in addressing various societal issues such as poverty, hunger, education, health, and environmental conservation. There are a number of nonprofits and charitable organizations that do essential work for these causes, making tangible differences in the lives of those who need it most. Many of these organizations rely on the support of donors and volunteers to serve their respective communities. Donated dollars, goods, and time, contribute to providing meals to those who need them, educational opportunities to underserved communities, preserving natural habitats, and much more making the impact of philanthropy undeniable. 

The Joy of Giving and Its Rewards

One of the most amazing aspects of giving is that it does not only benefit the recipients – it benefits the givers, too! Giving to others can be personally rewarding, leading to increased happiness and reduced stress. While you’re making the world a better place you’re also enhancing your overall wellbeing. In order to qualify for tax deductions, donations must be made to qualified organizations from the IRS guidelines.

In addition to emotional benefits, philanthropic giving also offers tax benefits including deductions, exemptions, and estate planning benefits. By working with your financial advisor, you can maximize these benefits while aligning your philanthropic goals and financial objectives.

Giving Beyond Giving Tuesday

Giving can be a year-round endeavor! While Giving Tuesday is a great way to get started, it is not the only opportunity to give. Talk to your financial advisor about building charitable giving into your long-term financial plan. Determine a fixed amount or a percentage of your income or assets you would like to allocate to philanthropy. Explore various philanthropic vehicles to maximize the impact of your donations. As a high earner, you have the unique opportunity to make a meaningful and lasting impact on the world through philanthropy. Start building your philanthropic legacy today!

Ready to begin building your charitable giving into your financial plans? Contact Blakely Financial today to get started. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
National Entrepreneurship Month: Managing Irregular Income and Retirement Options When You’re Self-Employed

National Entrepreneurship Month: Managing Irregular Income and Retirement Options When You’re Self-Employed

November is National Entrepreneurship Month and is dedicated to celebrating entrepreneurs, their spirit of innovation, risk-taking, and the economic growth they bring to our communities and the global economy. Honoring these entrepreneurial spirits would not be complete without acknowledging the unique financial challenges they face as self-employed individuals. In this blog, we’re answering common questions about managing irregular income and retirement options when you’re self-employed. These financial strategies and considerations will help you build a healthy financial future as an entrepreneur. 

How can I plan for my retirement while also reinvesting in my business?

When you are self-employed and running your own business, it is tempting to reinvest every dollar you earn right back into your business. Of course, it is important to reinvest some of your earnings to fuel essential growth in your business, but your financial security is also of high importance. Balancing these needs can be challenging, but is possible with proper and thoughtful planning. There are various types of retirement accounts for self-employed individuals including SEP IRAs, 401(k)s, and SIMPLE IRAs. These accounts offer tax advantages while allowing you to save for your retirement and a financially healthy future. The key to successfully utilizing a retirement fund is to contribute consistently, even when income is irregular. Work with a financial advisor to establish a realistic retirement savings goal, and aim to meet it each year. 

What deductions and credits are available to entrepreneurs?

There are many tax deductions and benefits available to self-employed entrepreneurs. The Tax Cuts and Jobs Act (TJCA) went into effect in 2018 and put several changes into place in tax deductions for the self-employed, some of which are permanent and others which are temporary. The following are only some of the current deductions that may be available to you to help reduce your taxable income:

  • Self-employment tax deductions refer to Medicare and Social Security taxes self-employed people are required to pay
  • Home office deductions allow you to deduct the cost of any workspace used regularly and exclusively for business, the business percentage of deductible mortgage interest, home depreciation, utilities, and repairs if you own your home. Rent deductions are also available if you rent your office space outside of your home. 
  • Internet and phone bill deductions allow you to deduct the business portion of these expenses regardless of whether or not you claim home office deductions. 
  • Health insurance premiums deductions are available if you pay for your health insurance premiums and are not eligible to participate in a plan through your spouse’s employer.
  • Meal deductions are relevant when traveling for business, at a conference, or dining with clients. 
  • Travel deductions apply to business travel lasting longer than an ordinary workday, requiring rest, and taking place away from where your business is located. 
  • Retirement plan contributions deductions are available and help you build up tax-deferred investment gains for the future.

Tax credits such as the Small Business Health Care Tax Credit and the Research and Development Tax Credit are also available. It is important to review your deductions and credits every year in order to make your business as profitable as possible. Consider speaking to a financial professional to help you maximize your benefits while remaining compliant with tax laws.

How can I ensure financial security for myself and my family after retiring from my business?

Planning for a financially secure retirement is not solely about accumulating wealth, it also involves creating a reliable income stream in your post-working years. Many different strategies can be used to build your retirement income plan such as investments, annuities, and Social Security. Additionally, be sure to create your estate plan to ensure your wealth lasts beyond your lifetime and can contribute to your family’s financial security. Consider life insurance and disability insurance as an extra layer of protection in the case of unforeseen events. Sit down with your financial advisor to determine which options are best for you based on your personal retirement goals and your individual financial circumstances. 

How can I balance my personal financial goals with the financial needs of my business?

Balancing your personal goals with the needs of your business may be daunting, but it is essential to your (and your business’s) financial well-being. To begin your balancing act, set clear priorities for your personal finances while keeping your business’s financial needs in mind. Use these priorities to create a budget that accommodates both business and personal aspects of your life. Build an emergency fund into this budget to help take care of any unexpected expenses, whether they are personal or business-related. The most important part of budgeting is sticking to your budget! If you are struggling to establish or stay within your set budget, reach out to a financial advisor.

What steps should I take to prepare for audits or regulatory inspections?

Facing audits or regulatory inspections can be nerve-racking, but with proper records and a strong financial team, you can navigate them smoothly. The best approach involves maintaining accurate financial records and documentation to ensure transparency in your financial affairs. Keep receipts, bills, and records of any necessary communication on hand. Additionally, take time to understand relevant regulations and tax laws through your own research and professional financial guidance. By staying informed and organized, you can help avoid any accidental lack of compliance to mitigate regulatory headaches.

By seeking professional financial guidance as an entrepreneur, you can proactively address financial challenges and reap the long-term benefits of effectively managing your irregular income and retirement planning. At Blakely Financial we understand that running a successful entrepreneurial venture is challenging, and our team of financial advisors would love to see how we can support your entrepreneurial efforts. Contact us today to get started. 

 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.

Debunking 5 Common Financial Planning Myths

Did you know only 74% of Americans partake in financial planning and 90% of people say financial planning helped them achieve their savings goals? Financial planning is for everyone, regardless of income level, as it plays a major role in achieving financial security in the long run. These common financial planning myths often prevent people from engaging in financial planning, and we’re here to debunk them. 

Myth: It’s Too Late to Start Financial Planning

Don’t be fooled by this common financial planning myth – it’s never too late to begin financial planning! It is essential to recognize the power of starting now to ensure your financial security and well-being in the years to come. Even small steps can make a significant difference in achieving your financial goals, whether they are big or small. Talk to your financial advisor to begin your financial planning journey and see what steps you can take towards a secure future. 

Myth: Financial Planning is All About Investments

While having a diverse investment portfolio is a critical aspect of your financial plan, the financial planning process does not solely involve investments. In reality, it encompasses many elements including the following (and more): 

Work with your financial advisor to create a comprehensive plan based on your unique financial situation and goals. Utilize every tool in your financial toolbox to maximize your financial benefits long-term!

Myth: Financial Planning is Too Complicated

Financial planning can seem daunting, but your plan can be as simple or as complicated as you need it to be. You don’t need to be a financial expert with complex financial knowledge to create a basic financial plan! Simplify the process by breaking it down into more manageable steps. There are many resources and tools available for you to begin your plan, and financial advisors are here to assist you every step of the way. 

Myth: Financial Planning is Only for Retirement

Financial planning encompasses life as a whole, not just retirement. The process can yield results important to various life stages and goals such as paying for education, buying a home, family vacations, or even simply financial security. Set short-term, mid-term, and long-term goals, and use your comprehensive financial plan to meet these objectives. 

Myth: Financial Planning Guarantees Wealth

During the financial planning process, it is important to have realistic expectations for yourself and your finances. A financial plan can significantly improve financial well-being, but it does not guarantee instant wealth. By setting realistic and achievable financial goals, you have the opportunity to build your wealth over time. 

A financial advisor can significantly improve your financial planning process and help you lay your path to achieving your financial goals and securing your financial future. Contact Blakely Financial today to get started. 

 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being. Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Understanding Social Security Survivors Benefits

Understanding Social Security Survivors Benefits

Social Security provides retirement income for workers in the United States by replacing a portion of their pre-retirement income based on their lifetime earnings. What happens to your benefits when you or an immediate family member passes? In this article, we explore how Social Security benefits can extend beyond your lifetime and support your loved ones as Social Security survivors benefits. 

Defining Social Security Survivors Benefits

Social Security survivors benefits refer to the portion of Social Security funds set aside as a form of life insurance for widows, widowers, and any dependents of eligible workers. Funds begin being set aside from the day you start paying into your Social Security fund. There are two main determining factors when deciding on the presence and status of benefits: the deceased’s work history and the credits they have accumulated. The more years an individual works and is paying into the fund, the more credits they will earn, leaving a more significant benefit for loved ones to access after their passing. The number of credits needed to provide survivors benefits differs based on the worker’s age at the time of death. No one needs more than 40 credits to be eligible for Social Security benefits, so with the ability to earn up to 4 credits per year, anyone working and contributing to Social Security for at least 10 years is eligible. Each situation is different. For more insight, talk to a Social Security claims representative about your situation and choices.

Who qualifies for these benefits?

If you meet the necessary work requirements, different family members may be eligible to collect survivors benefits including:

  • Spouse
  • Ex-spouse
  • Children under a certain age
  • Parents over the age of 62 and dependent on your income

It is possible to have multiple survivors benefits within a single family but the amount that can be drawn for each within a single household is capped by the maximum family benefit. The percentage of benefits they receive will vary as follows, according to the Social Security Administration: 

  • Spouse or ex-spouse, full retirement age or older: 100%
  • Spouse or ex-spouse, age 60 through full retirement age: 71.5% – 99%
  • Spouse or ex-spouse with a disability, age 50 – 59: 71.5%
  • Spouse or ex-spouse caring for a child under age 16: 75%
  • Child under age 18 or who has a disability: 75%
  • Single surviving dependent parent: 82.5%
  • Both surviving dependent parents: 75% to each parent

Taxes and Optimizing Payout

Survivors benefits can be claimed even if the person making the claim is currently working. The amount may be reduced based on multiple factors including the survivor’s age and income. When you receive benefits of any kind, it is important to factor in taxes. The amount paid in taxes is determined by a calculation of combined income, which is defined as your adjusted gross income (AGI), plus nontaxable interest, plus half of your Social Security benefits.

When filing as a single individual if your combined income is: 

  • Below $25,000: Your Social Security benefits are not taxed
  • $25,000 – $34,000: 50% of your Social Security benefits are taxable
  • Over $34,000: 85% of your Social Security benefits are taxable

When filing status is married filing jointly if your combined income is:

  • $32,000 – $44,000: 50% of your Social Security benefits are taxable
  • Over $44,000: 85% of your Social Security benefits are taxable

Children may be subject to taxes on benefits if they hold trust accounts or brokerage funds. 

Someone already receiving their own Social Security benefits must choose between those and survivors benefits, they can not take both. Like retirement benefits, waiting until age 67 allows the payment amount to increase annually. Delaying survivors benefits may result in a larger payout overall than delaying your own Social Security. Talk to a financial professional to work out which option will have the highest payout. 

How to Apply for Social Security Survivors Benefits

Social Security survivors benefits are not automatic, you will need to go through a formal application process which can be completed by phone, online, or in person at a Social Security Administration office. Documents you will need to complete the process include:

  • Proof of death of your loved one
  • Birth certificate, for both you and your loved one
  • Proof of US citizenship, for both you and your loved one
  • Your loved one’s W-2 form or self-employment tax returns for last year
  • A marriage certificate, as a spouse
  • A final decree of divorce, as an ex-spouse
  • For other circumstances, other documents may be required

If you need assistance throughout the filing process, you are able to go into a Social Security Administration office either by yourself or with an advisor to work with a representative on your case. 

Contact Blakely Financial today to learn more about your Social Security survivors benefits. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securing Your Future: Tips for a Successful College Planning Journey

Securing Your Future: Tips for a Successful College Planning Journey

Education expenses represent a significant financial commitment that accompanies us throughout our lives. Whether you’re considering having children in the future or you have teens nearing college age, we are here to equip you with essential knowledge and guidance for success in education planning.

Plan Based on Career Development

Work with your children to create a plan based on career development. When it comes to selecting a college, it is crucial to consider schools with programs and styles that align with future goals and aspirations. While small details are important, keep your eyes on the big picture: future success! Research the schools your children are considering and be sure to explore the degree programs each school offers to ensure they are properly equipped to help develop the skills and knowledge needed. The right college can make all the difference! 

Private vs Public Universities

When selecting a school, it is important to understand the details of the school and program. Each college or university offers a different price level dependent on many factors including program length, region/state, and type of educational institution. 

One of the most significant differences will be whether the school is public or private. Public colleges are mainly government-funded. They tend to have a wider selection of programs, more research opportunities, and a larger student body. Private colleges rely heavily on tuition, fees, donations, and endowments for funding and can be either for-profit or non-profit organizations. They often have more money available for grants and scholarships in addition to federal financial aid. 

The following are the estimated average costs of a full year of college at private and public colleges (via LendingTree):

  • Community college (public, in-state): $4,864
  • Community college (public, out-of-state): $8,622
  • Private community college: $15,460
  • Public two-year (in-district): $17,580
  • Public four-year (in-state): $25,290
  • Public four-year (out-of-state): $40,940
  • Private four-year: $50,900

College Savings Plan

A college savings plan is a crucial piece of the college planning puzzle and the foundation of any successful college financing plan. Think of your savings as a down payment on the total cost of college, similar to a down payment on a large purchase like a car or a home. 

Only 33% of families use a college savings plan to save for their child’s education. Whether you’re a new parent or already have children nearing their college years, it’s never too early or late to start saving to give them the best opportunities for success. Setting aside money over a long period of time takes discipline and even sacrifice, but can yield surprisingly positive results when done regularly. Work with a trusted financial advisor to help you navigate the process and create a plan tailored to your own goals and budget.

Financial Aid

Financial aid is a broad term for money used to help pay for college. It can include loans, grants, scholarships, and work-study funds. Ideally, you want to get the most from grants and scholarships to therefore have the least amount of loans possible. 

Colleges are the largest source of grant aid, with annual awards based on both need and merit. The federal government has two central grants, the Pell Grant, and the Supplemental Educational Opportunity Grant, which are reserved for those with high financial need. The federal government’s main contribution to financial aid is student loans, both Direct Subsidized and Direct Unsubsidized, which are available to all students regardless of their financial needs. 

Many colleges will have a net price calculator available on their website which can be used to estimate how much grant aid a student will receive from the school based on their financial and academic information. Use this to compare your estimated out-of-pocket cost at several schools and factor affordability into your college planning decisions. 

College is a significant investment, and understanding the financial aspects from college funding to school selection is crucial. The Blakely Financial team is here to help. Contact us today to get your college planning journey started.

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
The Benefits of Owning Property

The Benefits of Owning Property

June is National Homeownership Month, making it a great time to explore the benefits of owning property. Real estate holds great investment potential and can be a rewarding long-term strategy for building wealth. Owning property offers a range of advantages, which can be extremely beneficial to your financial security. Here we’ll delve into these benefits, highlighting why owning property can often be a smart financial move.

Builds Equity

Owning property allows the owner to build equity over time. Equity is the portion of your property that you own, calculated by subtracting your remaining mortgage balance from the property’s current market value. As you make mortgage payments and property values appreciate, your equity grows. Building equity means you are more likely to make a profit when selling the home, even with an outstanding balance. With higher equity, you have a better chance of selling the property for more than you still owe on the mortgage, even if the market changes. Homes are one of the few types of assets with the potential to appreciate in value, giving you the opportunity to build long-term wealth.

Increases Your Net Worth

Net worth is the value of your assets minus your liabilities. Any property you own is an addition to your portfolio of assets and over time, as property values rise, your net worth will also increase. Historically, real estate has shown long-term appreciation, making it a valuable component of a diversified investment portfolio and a significant contribution to increasing net worth. Appreciation will vary by market.

Opportunity for Tax Deductions

Mortgage interest payments are tax-deductible. Additionally, in most countries, property taxes paid on the property you own are eligible for deductions. If you use a portion of your property for business purposes or rental income, further expense and depreciation-related deductions may also be possible. With all of these deductions, owning property can reduce your overall tax burden. 

Passive Income Source

Investing in rental or other income-generating properties offers one of the biggest benefits of owning property – passive income. This means that the property can provide a steady and reliable cash flow with little maintenance involved. This recurring income can help cover mortgage payments, any other property expenses, and even additional income. This is a great option for those looking to diversify their income streams, make some money on the side, and/or increase financial security during retirement.

Before investing in income-generating property, work out the cash flows to ensure that it is profitable for you. You will want to assess whether your income from the property will be consistent before purchasing. Consider all your expenses and that this new rental income may be taxed differently than employment income. 

Greater Security

Owning property offers a sense of security and stability in case of emergencies. It provides the assurance of having a place to call home without the risk of sudden changes in terms or potential eviction. Additionally, owning can act as  hedge against inflation as property values tend to appreciate over time. Real estate owned becomes a tangible and valuable asset serving as a foundation for long-term financial security, 

Owning property reaps a range of benefits to enhance your long-term financial health and build your wealth. When developing your investment strategy, consider the advantages of property ownership as it can be a powerful asset in building a strong financial future. Consulting a financial advisor can be helpful when making decisions regarding the purchase of property. Remember to consistently evaluate your financial situation to ensure your plan aligns with your goals. Contact Blakely Financial today to get started on your property ownership journey. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.

Planning Life’s Biggest Vacation: Setting Retirement Goals

Like a summer vacation, ‘life’s biggest vacation’ requires detailed planning. Retirement goals differ for everyone as they are dependent on your current lifestyle and how you see yourself living post-retirement. Making informed decisions when setting retirement goals will help you create a plan and guide you toward the happy retirement you’ve always dreamed of. Use these tips to start planning your retirement today!

Set Your Retirement Goals Early

Goals cannot be achieved if they are not identified ahead of time. When setting your retirement goals, consider where you would like to see yourself after retirement. What would you like to be doing? Where do you want to live? What are the interests and passions you would like to pursue? Answering these questions will allow you to begin road-mapping your retirement plan and solidifying your financial security. 

To most effectively plan your retirement, ensure your goals are specific, measurable, and attainable. The earlier these objectives are set, the sooner you can begin saving and investing. You will be able to establish a solid foundation for a secure and enjoyable retirement early on, keeping your options open and avoiding unnecessary financial strain later on in life.

Create a Retirement Timeline

When do you plan to retire? Once you decide, you can set or adjust your goals to match your ideal timeline. To determine if this period is realistic, assess your current financial situation. Get a clear picture of your financial health by taking a look at your assets, liabilities, and investments. Use this information to make informed decisions about saving and investing for retirement.

Work backward from your ideal retirement age to set milestones along the way. These could include saving amount targets, investment goals and strategies, and other financial decisions that will impact and contribute to your long-term retirement goals. 

Know How Much You Need to Save

When determining how much you need in your retirement fund, consider your basic needs, emergency funds, and leisure. Additionally, factor inflation and healthcare costs into your goals, as the cost of living tends to increase as time progresses. A general rule of thumb is to aim for between 70 to 85 percent of your pre-retirement income to maintain your lifestyle post-retirement. 

It is important to know where these funds for day-to-day living expenses and beyond will come from without a steady paycheck. Keep in mind Social Security, pensions, and individual retirement accounts. Take advantage of any plans offered by your employer such as 401(k)s and IRAs. Contribute as much as possible to these accounts, especially if your employer will match your contributions. Also, think about diversifying your portfolio of investments, and considering risk along the way.

To calculate how much you need in savings, assess your current savings and estimate your future retirement income from various sources like Social Security, pensions, and rental properties. Calculate the retirement gap by subtracting your estimated future retirement income from your current savings. This will give you the amount necessary to bridge the gap. Divide the retirement gap by the number of years until retirement to determine your necessary annual savings. Remember that these calculations are just a starting point. It is important to regularly reassess your progress and adjust as needed. 

Setting retirement goals allows you to take proactive steps toward achieving financial freedom and a comfortable retirement. Remember, retirement will not look the same for everyone. Your plans will differ depending on your age and aim and should be reviewed and adjusted periodically to stay on track. Planning your retirement can be overwhelming but talking to a financial advisor can significantly help you in your journey. Here at Blakely Financial, we want to help you embark on life’s biggest vacation fully prepared and ready to make the most of your years in retirement. Contact Blakely Financial today to get started. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.

 

How to Evaluate Your Financial Health

How to Evaluate Your Financial Health

As we approach the midpoint of the year, it’s the perfect time to check in on your financial health.  To help you assess your financial health, we’ve compiled a list of key indicators to gauge your financial well-being. By reviewing these indicators, you can make informed decisions toward achieving your financial goals.  

1. Do you stick to a budget?

A budget is an integral part of your financial plan. A budget can keep you from overspending and help you stay on track with saving. If you don’t have a budget yet, it’s not too late to create one. Alternatively, if you have a budget but it doesn’t seem to be working, you can change tactics.

 There are several budgeting methods you can use, some of which include: 

  • The 50/30/20 budgeting rule: With the 50/30/20 budget, you allocate your income into three main categories according to percentages. 50% goes to “needs” (such as groceries, housing, and utilities), 30% goes to “wants” (such as entertainment, shopping, and takeout), and 20% goes to savings (towards an emergency fund, retirement, or long-term goals). 
  •  Zero-based budgeting: The zero-based budgeting method (also known as the zero-sum budget) encourages you to give every cent a purpose. When you’re done allocating where your income goes, there shouldn’t be any money left without a plan for it. 
  • Cash envelope budgeting: The envelope system (also known as cash stuffing) allows you to physically portion out your monthly income in specific categories and sort them into envelopes. Similar to the zero-based budgeting method, you would make a plan for every penny. 

2. How much do you spend?

The aim is to live below your means. If you spend less than you make, then you’re off to a good start. 

Tracking expenses is a helpful way to determine if you’re living below your means. You can use a spreadsheet, write each expense down in a notebook, or use a budgeting app. After you have tracked your expenses for at least one month, you will have a realistic idea of how much you spend. 

3. Are you saving?

Setting up direct deposit or automatic transfers into your savings from your checking account each payday are great ways to ensure that you are saving a set amount of money, rather than spending it.

4. Are you prepared for unexpected expenses?

Having an emergency fund for unexpected bills, emergencies, or major life events/changes is a necessary piece of your financial health. Ideally, you should have enough in your savings to cover 3-6 months of expenses.

5. Are you set to reach your financial goals?

In order to ensure you will reach your financial goals, it’s important to identify what your goals are. Write down your short-term and long-term savings goals, and be sure to make these goals measurable with deadlines. If you need a more sustainable approach to your finances, working with a financial advisor can make all the difference.

When you are financially secure, life feels more manageable. If your plan needs some tweaking, consult with your trusted financial advisor today to stay financially healthy. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.
Financial Spring Cleaning Tips

Financial Spring Cleaning Tips

Spring cleaning isn’t just for your home; it’s also an excellent time to give your finances a refresh. Whether you’re looking to get a better handle on your budget, pay off debt, or build your savings, taking some time to review your financial situation and make some changes can have a big impact.

Review Your Budget

Perhaps you started the year off strong by staying true to your budget, but you’ve fallen behind in recent months. Does your budget need a refresh? Look at the areas in which you are overspending, and make a plan to correct them in the future. Having too strict of a budget can set you up for failure and stress, so it’s important to make an accurate assessment of your spending habits rather than attempting to meet an unattainable goal. If your previously determined budget is no longer feasible, now is the time to make adjustments.

Pay Off Debts

If you have been avoiding debt, spring is the perfect time to sit down and get a full sense of what you owe. Ignoring your debt will only make it grow larger! Take inventory of your debt and decide what needs the most immediate attention. Prioritize payments according to billing due dates and interest rates. Create a timeline for yourself for exactly when you would like the debt to be paid by, and how much you need to contribute over time to reach that goal. 

Organize Documents

If your important documents are not in order you may find yourself frantic when you need to access them in the future. Prevent these issues by arranging your physical papers in a safe and secure spot, and digitizing wherever possible – this way, they are searchable! Prepare yourself by keeping your birth, marriage, and death certificates, social security cards, passports, and documentation of major loans and insurance policies in a firebox. Securely dispose of documents that are no longer necessary, such as paid utility bills or pay stubs from previous years. 

Check Your Savings

Whether your main priority is your retirement fund, your kid’s college fund, or planning a major life event, take the time to check in on all of your different savings accounts. If you notice some are not on track with your goals, plan how you will bolster these funds over the course of the year. One of the most important, but easily forgotten, aspects of a sound financial plan is an emergency fund. This money should be easily accessible, and significant enough to protect you from unexpected crises. Medical emergencies, car problems, and home repairs can severely affect your budget. Having cash set aside for such events will prepare you for the worst possible scenario and decrease your stress level, as you will be confident in your ability to handle anything life throws your way.

Look at the Big Picture

Once you have taken inventory of your progress so far this year, think broadly about how you are progressing in your long term financial plan. Some years are better than others, so it is okay if you are not exactly where you hoped to be by this point. The most important thing is to maintain a sound plan that will guide you on your path to financial freedom. Checking in with your overall progress in relation to your goals is a great way to round up a financial spring cleaning, and ensure that you are on the right track! 

 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.

 

5 Staggering Stats About Women & Finance

5 Staggering Stats About Women & Finance

As we celebrate Women’s History Month, it is important to look into the ways in which women differ from men in the financial world. Though women have been greatly increasing their stake in global finances in recent years, they still have fewer advantages than men. You may be surprised to learn just how large the gender gap is when it comes to high-power positions, investing, savings, and marital finances. 

Only 19% of women are confident they’re on track to retire without running out of money

The fact that only 19% of women are confident they are on track to retire without running out of money, compared to 35% of men, implies a significant gender gap in savings plans. Women are more likely to face financial insecurity in retirement due to various factors such as the gender pay gap, caregiving responsibilities, and longer life expectancies. Women tend to have lower lifetime earnings and savings than men, which makes it challenging to achieve their retirement goals and can lead to a lower quality of life in later years.

This gender gap in retirement savings highlights the need for greater financial education and support for women, including increasing access to retirement savings plans and financial advisors who can help women navigate the complexities of retirement planning. Additionally, policymakers and employers must address the systemic barriers contributing to the gender gap in savings, such as the gender pay gap and lack of paid leave for caregiving responsibilities.

40% of men have invested money in the stock market compared to just 22% of women

There are nearly twice as many men invested in the stock market than women. This difference could be incredibly costly. Though the cause of this discrepancy cannot be determined with certainty, it is likely rooted in social and cultural norms which discourage women from taking an active role in financial decision-making. Additionally, the lack of representation of women in the financial industry can also create a barrier to entry for women, as they may not see themselves represented in the industry and may not have access to female financial advisors or mentors.

Addressing the gender gap in stock market participation requires a multi-faceted approach which includes increasing financial education for women, addressing systemic barriers limiting women’s financial opportunities, and promoting greater gender diversity in the financial industry. By creating a more inclusive and equitable financial system, we can help ensure all individuals, regardless of gender, have the opportunity to achieve financial security and prosperity.

If given an extra $1,000 men are 35% more likely to invest it 

There’s an investing gap between men and women. And for women who earn six figures, this gap could cost them as much as $1 million over a 30-year period.The disparity in investment behavior may be attributed to differences in financial literacy, risk tolerance, and cultural and societal norms between men and women. Men may be more likely to invest an extra $1,000 due to greater exposure to financial education and encouragement to take financial risks, whereas women may be more risk-averse and may prioritize more conservative investment strategies.

58% of women married to men leave financial planning and investment decisions to their husbands

Every couple is different in their ideas about financial responsibility, but most women leave the long-term planning and investing decisions up to their husbands. When wives are not involved in the financial planning, they could potentially be blindsided by the adverse effects of failed investments or lack of saving by their husbands. Though many relationships are successful under this planning system, it can leave women at a disadvantage by limiting their control over the long-term financial decisions for the marriage. 

Only 10% of Fortune 500 Company CEOs are Women

This statistic has remained around 8% for many years, so the increase is certainly a good sign of the increased power of women in the business world. However, 10% is still a shockingly small number considering the overall contribution of women to the workforce. This underrepresentation of women in top-level positions not only limits their opportunities for professional growth and economic advancement but also reinforces the systemic barriers preventing women from achieving their full potential in the workplace. Additionally, the lack of diverse perspectives in corporate leadership can lead to a lack of understanding of the needs and experiences of women, which can negatively impact company culture, policies, and decision-making.

Moreover, women’s underrepresentation in top corporate positions also contributes to their overall financial power. When women are excluded from the highest echelons of corporate leadership, it can exacerbate gender inequalities in wealth and income, perpetuating a cycle of economic disadvantage for women.

The Bright Side & Next Steps

Thankfully, plenty of progress has been made, and there is more to come. According to Fidelity’s 2021 Women & Investing Study of over 5 million investors in the last 10 years, on average, women outperformed their male counterparts by 40 basis points. The study goes on to share more women are investing than ever before.

Here are a few steps women can take toward financial freedom:

  • Seek the advice of a trusted advisor (like Blakely Financial). Investing can be intimidating, but working with an expert is the best way to make sure you’re getting the most out of your money.
  • Improve your financial savvy, you can improve your financial savvy by speaking with your financial advisor, referencing trusted online resources, and attending financial webinars.
  • Get a clear image of your financial situation, analyze your monthly expenses, and divide them into your needs, wants, and wishes. This will help you identify any extra income you can use towards investing.
  • Take advantage of all employer-offered benefits, for example: your employer may offer a 401k match. Make sure you are utilizing every financial opportunity your employer has to offer.

We believe strong representation of women in the financial field can encourage and inspire other women to make the most of their wealth. With an experienced financial advisor, successful women can take full control of their money and build a strong long-term financial plan. 

Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.