Did the recent 35-day partial government shutdown affect you or someone you know? It’s quite possible, considering it forced 800,000 federal workers to miss paychecks and hurt many small businesses. And since the three-week spending bill expires soon, there could be even more financial repercussions.
These recent circumstances certainly give reason to pause and wonder: are you prepared for a financial shutdown in your life? If that question feels too broad, what about this one: if you were in a serious accident and had to miss work, how long would your current financial situation carry you? 35 days? 6 months?
This is about more than just creating an emergency fund – though you should, since it’s widely touted 40% of Americans can’t cover a $400 emergency. And it’s not just about having proper insurance coverage, though that’s certainly important, too. The bigger issue is thoughtfully creating a financial plan and knowing where to turn if the bottom falls out.
As a plan sponsor, you might feel the pieces in your plan are well-aligned. That’s positive news! But can the same be said for your employees? If they can’t currently address a $400 bill, how would they handle a total shutdown if it occurred? You can help prepare your team by proactively providing education and wellness opportunities, offering useful resources that speak to real situations, and taking the fear out of financial conversations.
Employees don’t get off the hook that easily, though – everyone is ultimately responsible for themselves. Consider the last time you gave yourself a financial checkup. Start with a budget you’ll actually follow, build up your emergency fund, and pay off debt. Then push deeper – ask for help to balance college funding, utilize a health savings account, max out your retirement account options, and optimize tax strategies.
The Shepherd Financial team is always only a phone call away. Whether you’re currently in a financial crisis or want to create a plan to see you through one, we want to help.
But that’s not typical of the majority of America.
No, most Americans have regret about past financial decisions, are embarrassed about their current financial situation, and worry about their financial future. You certainly wouldn’t know it to look at them. Social media perpetuates the myth that all is well, but consider these scenarios:
What you see: A couple strolling through a perfectly-filtered Italian vista.
Reality: A non-budgeted Italian vacation adding to a mountain of credit card debt.
What you see: A sweet fall montage of the family, including a blooper picture where the dog pokes his head out of a pile of leaves.
Reality: A stressed-out couple that doesn’t know how to pay for their kids’ college educations, fund their own retirements, or care for their parents in the coming years.
What you see: A series of self-affirmations suggesting the world is an oyster and positivity is the greatest force of nature.
Reality: A 24-year-old who has no ability to pay off their student loans or get off their parents’ insurance in the foreseeable future.
Reality rarely matches the highlight reel we see online. As we head toward Halloween, I’d urge you to consider taking off the mask and removing your own financial filters. Have you admitted the struggle is real? Is the cost of transparency greater than the actual cost of your financial burden? It’s difficult to get support if people aren’t aware of your real circumstances.
We are currently faced with a financial epidemic: many employees are on unstable footing due to debt challenges and a lack of emergency savings; others abruptly find themselves responsible for both their aging parents and dependent children. There’s no doubt about it – many employees are financially stressed.
These financial burdens can have negative effects at home and in the workplace, impacting health, relationships, and productivity. As an employer, this should concern you – aside from the possible adverse bearing on your company’s bottom line, it’s also discouraging to know financial stress can have the power to derail top employees.
In fact, 45% of employees say financial matters cause them the most stress in their lives. We believe it’s essential to closely and honestly examine the financial wellness programs currently in place within your company – are they adequately addressing your employees’ needs? Are they producing the behavioral changes necessary to improve employee well-being? If they’re not, consider the following:
Problem: More than a quarter of employees are using credit cards to pay for monthly necessities because they can’t afford them otherwise – and it’s an issue across all income levels.
Suggested courses of action: Host a budgeting and debt management course to help employees understand where their money is coming from, as well as where it’s going. Teach employees how to monitor their credit scores, emphasizing the power of compound interest and how it can either work for or against them.
Problem: Among employees with student loans, a large percentage indicate these are having a moderate to significant impact on their ability to meet other financial goals.
Suggested courses of action: Provide resources to educate employees about student loans and possible payment plans. Offer opportunities to learn about college savings plans to help ease future student loan burdens. Implement a student loan repayment benefit as part of your overall benefits package.
Problem: 47% of employees have less than $50,000 saved for retirement.
Suggested courses of action: Participants must understand the importance of starting early, how to take advantage of the company match, and what kind of gap they face between what’s saved and their retirement-ready futures. Make sure you’re providing sufficient education about your company’s retirement plan, how to enroll, your recordkeeper and their website, and where they can go with any kind of financial questions.
The Shepherd Financial team specializes in customized financial wellness programming, so we’d love to have a conversation about how we can improve your employees’ well-being. Connect with us today at 844.975.4015 or firstname.lastname@example.org.
Source: pwc, Employee Financial Wellness Survey, 4.16
Valentine’s Day reminds us now is the perfect time for ‘the talk’ with that special someone in your life. And since this is a financial blog, I obviously mean the money talk. True, communication can be challenging, and the topic of money is a sore spot for many people. But the more you can speak honestly about money, the less fear and anxiety will be wrapped around it. The dialogue may look different based on your relationship status and life stage; regardless, it’s important to have the conversation now, as well as make room for future conversations.
You may benefit from making individual financial balance sheets, including all your debt and savings, before you begin talking. This way, you’ll have a better idea of your net worth. You may also compile a list of money questions or concerns you’d like to cover. It’s worthwhile to discuss your current financial situation, share values and long-term goals, and talk through spending and saving habits. Not being willing to talk about money can lead to big issues, both now and down the road. Open communication, though, gives the opportunity to create shared vision for the future, tackle problems as a team, and have accountability for your financial decisions.
Determine your own money values. This is where you’ll examine if you value saving or spending, as well as think about the various lifestyle standards you have. If you’re single and value the ability to travel, you’ll likely take that value into a relationship. Potential partners may discover conflicting values. Married couples may disagree about saving for college for their kids versus boosting their own retirement savings. It’s ok to disagree, but finding common ground is key. And keep the big picture in mind: creating safe space for ongoing dialogue about a positive financial future.
It’s also critical to come clean about your financial baggage. If you have student loan debt or a spending habit you’re having trouble kicking, hiding the issue will only compound it. (Literally – interest either hurts debtors or helps savers, but it doesn’t sit still.) Once you’ve talked about where you’ve been and where you are, look ahead. Are there any financial obstacles ahead? What are you hoping to do with your money in the future? Highlighting these can help you better see how to actually plan for the future.
Of course, not every money conversation needs to be so in-depth, but it helps to check in at least once a month to ensure you and your partner are on the same page, spot any problem areas quickly, and maintain momentum toward your goals. Your first financial talk together may be a little awkward, but with time, you’ll become fluent in a shared money language.
It’s easy to see why January is considered the start of new things – there’s a fresh calendar year and a plethora of resolutions get shouted from the rooftops. This feels like a chance to hit the reset button in many areas of life. At this point, you can see the race has a clearly-defined finish line – and it’s 12 months away. Of course, for some people, January is really right in the middle of the action. Maybe you’re gearing up for your second semester and looking at a somewhat shorter distance to the finish line.
No matter the length of your particular race, though, it’s helpful to have a good idea of what you’re getting into. As runners will tell you, there is a vast difference between sprinting 100 meters and grinding out a marathon. From race preparation and strategy to gauging your pace along the way, you will benefit from having a plan in place before your feet ever leave the starting line. At Shepherd Financial, we believe financial wellness is one important piece of whole-life wellness. So while we hope financial goals are part of your plan (and want to help you set and achieve those goals), don’t stop there. Pause and think for a moment about how financial well-being could positively impact the rest of your life. Do you want to pay off debt? Save more for retirement? Increase your charitable giving? Send your kids to college? Travel more? We can help you create a plan and work toward those goals.
It’s also important to realize not all runners are built the same. If you’re a sprinter, don’t force yourself into strapping on a hydration belt to run 26.2 miles. Set yourself up for success by running your race. You may find it useful to set smaller goals with shorter timelines. We believe each of our clients has a unique lens with which they see the world. Getting to know you, as well as your strengths and weaknesses, is part of our process – if we craft a financial plan that doesn’t fit your specific needs, it doesn’t make sense to pursue it.
Don’t forget your running buddies! When you head out to pound the pavement for a few hours, it’s nice to know you have a support system by your side. Think through what you want to accomplish, then find the teammates who will encourage you to get there. Because our focus is creating retirement-ready individuals, our team is constantly producing new tools and educational resources. We love finding customized solutions for retirement plan sponsors, participants, and individuals.
The holiday season is officially in full swing – Halloween and Thanksgiving decorations have been tucked into their boxes and shoved to the back of the attic until next year; meanwhile, icicle lights seem to have sprouted overnight, attaching themselves to just about everything in sight. The smell of gingerbread permeates the air. Bell ringers shout greetings, and reindeer antlers are worn by both children and adults with equal delight. If that doesn’t put you in the mood to watch White Christmas, Elf, or Home Alone, I just don’t know what will.
This time of year, though, can be not-so-merry for many individuals and their budgets. The days following Thanksgiving are particularly fraught with perils: Black Friday, Small Business Saturday, Soon-to-be-Hanukkah Sunday, Cyber Monday, Not-Quite-Christmas Tuesday. (Sadly, most of these are real.) Radio ads blare their three-year, interest-free payment plans to buy things you can’t afford now, like diamonds or laptops or golf clubs. Everywhere you look, there’s a sense of urgency to spend money: Buy now! Sale ends soon! One day only!
I’m here to give you permission to pause. Halt the holiday madness and take a step back. Pull out of the moment and decide: is this worth it? Is it worth the money you’ll spend or the stress you’ll bear?
I know it’s an unpopular sentiment, but this may be the one thing that keeps you sane. Repeat after me: you don’t have to do it all, buy it all, or be it all.
If you’re already stressed about money, buying into the notion you must spend more to make others happy will only worsen the situation. So try something new this season: buy less and do more things that truly feel worth it to you. You’ll enjoy the carols, snowflakes, and memories more now; as a bonus, you won’t start the new year with a fistful of receipts and a maxed-out credit card.
I’m not endorsing becoming a scrooge – simply be selective about where you invest your time, energy, and money. You’ll be surprised at how implementing this small practice gives the same permission to others. Suddenly, all our hearts are growing three sizes, and it really might just be a wonderful life after all.
Wishing you a merry, bright, and peaceful holiday season!
For nearly two years, our team has conducted a monthly financial wellness webinar for participants in the retirement plans we advise. These webinars focus on different topics meant to engage participants with their overall financial wellness. Some of our most popular presentations have been our Quarterly Market Reviews, The Basics of Investing, and Dealing with Financial Stress. We have one particular webinar so relevant, though, it’s been requested multiple times and in a variety of formats: Women and Investing.
But why? What’s the big deal?
The truth is, women face a totally different financial environment than men. With an ongoing gender disparity in compensation, years worked, risk tolerance for investing, healthcare costs, and overall lifespan, it’s no wonder there is an undercurrent of fear and confusion surrounding finances. Studies have revealed women do not feel confident – or even comfortable – discussing money or investing with friends, partners, or financial professionals.
Nearly 90% of women will end up managing their finances alone at some point in their lives1, whether due to not getting married, divorcing, or having their spouse pass away. This means learning to navigate expenses and medical/long-term care decisions on one income and without a partner with whom to plan.
So the big deal is this: women are falling far behind men when it comes to saving and retiring on their terms.
Our team simply refuses to settle for this reality. We want to empower women to ask – and answer – questions like these:
How should I initiate financial conversations with my spouse?
What’s a good plan for divorced ladies?
How soon is too soon to begin estate planning?
As a single woman, how do I get started when I feel so overwhelmed?
The process is simple, though it may not be easy.
Start by making a plan. Make it a priority to understand where you are (track expenses and create a budget) and where you want to be (create short-, medium-, and long-term goals). Identify areas where you need help (perhaps learning to invest, paying off debt, or determining your retirement income needs). Once you’ve done that, educate yourself – it’s good to engage in your own financial wellness! Make sure you figure out who’s on your team. It’s unreasonable to think you can or should do everything yourself. We have accessible, knowledgeable team members to make it easy on you. Take advantage of our resources and tools available. Finally, keep making the next right decision. Monitor your portfolio, stick to your plan, and look ahead.
Don’t let fear keep you on the sidelines of your own life.
1 National Center for Women and Retirement
To our friends, family, and clients in Houston, know we are thinking of you.
Ten years ago, our country was on the cusp of a terrible recession. The housing market crashed, unemployment spiked, and American households lost trillions of dollars in net worth. Considering we are currently approaching 100 months of economic expansion, are we about to see another downturn? It’s the question market analysts keep asking.
However, retirement planning takes a backseat when faced with immediate issues like finding safe housing and bottled water. It’s completely understandable to feel frustrated, confused, and scared by the world these days. In fact, those reactions are a good sign of your humanity. But there are times when these emotions can immobilize us. We don’t know what to do, how to help, or where to turn.
Doing nothing, though, produces nothing – so how do we move forward? Start by choosing to believe small actions can create avalanches – history has proven this over and over. When you are feeling overwhelmed, consider these seemingly small actions:
Fear does its best work in the dark. So take an honest look at the problems in your life and name them. Understanding what you’re facing is important; turning a blind eye tends to increase the chaos rather than help defeat it.
Equip yourself. Gather resources, knowledge, and the people you need by your side. Be humble enough to ask questions, make connections, and invest time into understanding the roots of the issue. It’s much easier to fight a battle when you are adequately prepared.
Find your lane. You can’t solve every problem – that’s like using a sprinkler to stop a forest fire. But you can figure out where your strengths lie; investing deeply into one thing can then produce a powerful fire hose effect. And remember that each person is unique, so it’s ok your purpose and passion happen to be different than someone else’s.
And finally, persist. I know that sounds unfathomable when you’re trying to take down a mountain with a tiny chisel. But enough little chips over time matter. Your small actions will create an avalanche.
Whether you’re knee deep in water and not sure how to remove it or knee deep in debt and don’t know how to budget, remember there are people who are trained to help. Make the phone call. Accept advice. Take one small action.
I’m not sure how it happened, but summer disappeared. Oh, the calendar may say it officially lasts until September 22nd, but every kid in Indiana will tell you: it’s over. Stores are packed full with back-to-school supplies, teachers are perfecting their classroom decor, and students are simultaneously excited and horrified at the thought of starting school in just a few days.
Here in the financial world, we’re probably more attuned to numbers than other people, so when we think about back-to-school time, it makes sense we’d immediately start doing the math. And in case you were not aware, having children can be expensive. Particularly when their school supply list seems to grow about a foot longer every year!
Instead of panicking, though, aim for making the back-to-school transition as smooth as possible, especially where your finances are concerned. Depending on the age and interest level of your kids, this can also be a great time to have financial conversations as a family.
To get the most bang for your buck this fall, try the following:
· Make a list of all supplies, clothes, and any other items your kids will need.
· Go through your house and determine how many of these items your family already has on hand, then update your supply list.
· Create a back-to-school budget based on this list, estimating how much money you will need to spend. Make sure your kids understand the limits they will have and encourage them to be creative in their choices.
· Highlight the priciest items (iPads, graphing calculators, backpacks, etc.) and focus on finding the best deals for them. This will involve doing a bit of research to see if there are coupons, rebates, or online-only deals to lower your costs.
· Many stores feature special sales on their social media sites, so it may be in your interest to follow them on Facebook, Twitter, or Instagram.
· If you can hold off on some supplies, wait until after the back-to-school season is over to catch some highly marked down items.
As your kids head back to school, focus on your own financial education. Learning how to make and successfully follow a budget for a specific event can give you great confidence in the ability to budget in day-to-day life. And mastering budgeting skills is the first step on the road to financial wellness.
If you need help learning to budget, want icebreakers to start financial conversations with your family, or need to figure out how to manage your debt, contact our team at Shepherd Financial for free resources and assistance.
In the financial world, we tend to think in quarters rather than seasons, use spreadsheets more than pencil and paper, and punctuate our speech with ticker symbols instead of adjectives. But Shepherd Financial is not your average retirement consulting firm.
Yes, our goal is to create retirement-ready individuals – whether that’s through our 401(k) plan participant engagement meetings or individual wealth management process. Our team is always focused on providing amazing, intentional service. What really differentiates us, though, is our desire to prioritize people, as well as their stories, lives, and goals.
We know that while not much actually changes between December 31st and January 1st, most people view the turning of the calendar page as their chance for a fresh start. The new year lies ahead, open and unblemished. If you are ready to charge into the new year with guns blazing, we applaud you. Take the world by storm!
But for others, the new year creates anxiety. And if you are one of the many people who experienced a tumultuous 2016, you may be looking back, weary and unsettled. Perhaps unexpected medical bills have financially swamped you. Maybe you are now responsible for the care of an elderly parent. You might feel uncertain about our country’s economic future. How you feel about these experiences truly matters.
And we know it can be quite common to let those feelings create a state of paralysis. Worry and fear twist in your stomach. You stop moving, and life simply happens to you. We get it. But know this: we see you, and your story matters to us. You are not alone.
If you’re hesitantly peering over the edge of the new year, our challenge for you is this: be the leading character in your own story. This will require turning hopeful eyes toward your circumstances, taking ownership of your situation, and making active decisions about what comes next.
You are not stuck unless you do nothing – so do something!
For some, that will include swallowing your pride and asking for help. Make the phone call you’ve been avoiding and set an appointment with a financial planner/counselor/personal trainer/doctor. Yes, it’s hard, but it is necessary to move forward.
Other people will need to take a long look at spending habits and commit to doing something different with finances this year. Maybe it means cutting up your credit cards, or perhaps it involves creating a budget and carefully tracking expenses in order to get out from under a weighty mountain of debt. Financial freedom won’t happen unless you deliberately work toward it.
Let 2017 be a year of positive change in your life. And if you need us to partner with you for either the first step or the long haul, our team is only a phone call away.