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Wealth Management Team

January 24 , 2017

2017 Resolution #2: Take Your Family On A Financial Road Trip With This Checklist

2017 Resolution #2: Take Your Family On A Financial Road Trip With This Checklist

Family road trips are a bit of a lost art. Back in the day, with nothing to fill the miles but scenery and books and conversation (a question-and-answer format consisting mostly of “Are we there yet?” and “No.”), road trips bonded families together one way or another with memories—and pictures—to prove it. 

 

Family finance is a different sort of journey, but it is similar to a family road trip in many ways. You are all in it together. Everyone has an opinion about how it should go. Everyone has places they want to see, and it takes careful planning to pull it off. Sometimes (like when you’re driving through Nebraska) it can feel like you’ve been on the road forever without making progress until you look behind you and see how far you’ve come.

 

We’re encouraging our Siouxland clients to take a family financial road trip in 2017 to help them see their saving, investing, and spending for the adventure it really is.

 

Decide where you want to go.


Every family has different goals, whether it’s to get and stay out of debt or save for life’s big moments, like college or a family vacation or retirement. It helps to break up the trip into segments to make it more manageable; most families break up their goals into quarterly or yearly increments. Make sure the ground you are covering—and your destination—is reasonable given your time frame, your income, and everybody you have on board.

 

Prepare for emergencies.

 

How is your emergency fund coming along? Standard practice is to make sure you have enough liquid funds to cover at least three to six months’ worth of expenses. Like making sure the spare tire is in good shape and you have snacks in the glove compartment, your emergency fund will ensure your family doesn’t miss a beat if you hit a bump in the road.

 

Take health into consideration.

 

With health costs on the rise, it’s important to save when and where you can. If your employer offers a flexible spending account for health care expenses, only put away as much as you believe you will use. Health savings accounts are a great way to take advantage of any free contributions given by your employer; if your employer offers no such match, make sure your HSA performs on-par with your other investment vehicles. Otherwise, consult your financial planner to find out other ways you can grow a healthy nest egg.

 

Keep your eyes on the road.

 

It’s easy to get distracted by market conditions or current events, just like traffic can make you second guess your course. Keep your eyes on the road. You are traveling a long way; large changes in routes may end up costing you more (or saving you less) in the long run. When in doubt, use your resources and get directions.

 

Fill up at regular mile markers.

 

College is on the minds of most family financial map makers, so make sure to add that to your list of pit stops. Fund your 529 with dedicated regularity using clear goals of how much should to into the tank every month. Do the same thing when saving for other large items (car, vacations, debt paydown, etc.—whatever you outlined at the start of the year). A monthly effort that pulls directly from paychecks will make this task more manageable.

 

Don’t be afraid to stop and turn around.

 

The end of the year is a great time to look back and make sure your retirement funds are doing what you set them out to do. If your retirement plan isn’t performing as it should, or if your other investments need more attention than a quick shout-out, take the necessary time to pull over and re-evaluate with your financial advisor.

 

Don’t forget to stop and enjoy the view.

 

It’s helpful to have family buy-in for financial journeys so that everyone knows where you are going and so that you get there together. Be age-appropriate; while financial worries shouldn’t be shouldered by the young, financial responsibility can be taught at any age. Brainstorm ways to save or reduce expenses as a team, show the benefits of meeting the decided goals, and be ready to celebrate successes was they come.

 

At Security National Bank, we always encourage regular and consistent reviews of finances. Sometimes it’s in the form of a Year-End Financial Checklist, and sometimes it’s a more casual glance from the front seat to make sure everything is behaving back there. It’s what we call “being invested in your investments” and, like road trips and so many other things in life, it helps to have a plan.

 

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