As a Financial Advisor, I meet with a large number of our members. And their situations run the full gamut, from just graduated from college to raising a family to living in retirement. Now, I’ve always said that each investor is unique and there are no one size fits all answers. And, I truly believe this. That being said, I do believe that everyone can and should save for their future.
I’m not saying that it is an easy thing for everyone, but that it is doable and absolutely important. Consider this: how many of us have actual budgets that we consult on a daily (or even monthly) basis for our spending? I would say, not many. If you do, more power to you. That is excellent, especially if you stick to it. But I believe that most of us have a simpler, less scientific way of controlling our spending. Basically, we spend our checking accounts down to a level that we are comfortable with, and then we stop. This level could be zero or $10,000 or $50,000, but whatever it is, it’s a point that makes us nervous to go below. So much so, that we will even start to slow our discretionary spending as we approach that level.
And while this is not a very logical or well thought out way to control spending, I believe it is very often the case. Deciding whether to go out this weekend, or to buy that new shirt often comes down to how much is in the checking account and how much longer until payday. And this brings us to a savings strategy that could work for everyone.
When you get paid, take some predetermined amount and put it in savings. Sounds simple, right? Well, it is and it isn’t. The simple part is the mechanics of doing it. It can be in the form of contributing to your 401(k) plan at work, a monthly investment into a mutual fund, or even just a transfer into a savings account. The best way to do this is to set it up so it goes automatically. That way you don’t have to decide whether to do it or not. And, that’s the hard part: just doing it. People can come up with millions of reasons why they can’t save, but I believe they can if they just try this method.
The logic of this strategy is based on the above assumption of how people manage their money. Whatever your balance is after pay day, you will likely spend all the way down to your “comfort balance”. If you get paid $1,500, and your comfort balance is $100, you will spend down to $100. If you get paid $1,500 and put $100 into a mutual fund, you will still spend down to $100. Same balance, but you will have put away $100 for yourself.
This is not a new or revolutionary way of thinking. It is the basis of the 401(k) plan you may have at work. Take the money out of your paycheck before it hits your checking account. If you don’t see it, you don’t miss it. This is also the idea behind the budgeting strategy of “pay yourself first”. In this strategy, you put in your budget a payment to yourself BEFORE all your other bills. And, even when we teach kids to save, this process comes up. A popular tool on Teach Children To Save day (April 24th) is a moon jar. A moon jar is a piggy bank in three sections: one for spending, one for sharing, and one for saving. Every time the kids get money, they split it into these three categories. If we can teach kids to do this, can’t we all commit to it as well?
Now, I know that real life and real finances are more complicated than words in a blog. But, I believe this is a real world way of thinking. Instead of hoping that there will be money left at the end of the month to put towards your savings, try putting your savings first and start building for your future!
Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Verity Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.
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A Financial Advisor registered through CUSO Financial Services, L.P., Gavin has 25 years of experience as an advisor in the Puget Sound area.
“I believe every client is unique and deserving of a personalized financial plan that will help them reach their individual financial goals. Before I make any recommendations, I like to get to know my clients. By asking the right questions, and developing an honest, trusting relationship, I can really get a sense of what’s going to work best for them.”
Gavin graduated from the University of Washington with a BA in Business Administration and started his financial career with US Bank in the Investment Department. Prior to joining Verity in 2006, he spent eight years with Piper Jaffray.
So what is Gavin’s vision for his dream retirement?
“My dream retirement would be absolutely worry free: financially, emotionally, and in every aspect of life. My finances would be in order so expenses for travel, luxuries, and gifts for the kids, grandkids, and great-grandkids would be taken care of. My kids would be financially sound, so I would be confident in their prosperity. This would give me the freedom to travel and play and do whatever it is I want to do.”
When Gavin’s not working, he enjoys spending time with friends and family, watching Husky football and taking weekend trips around the Northwest.
Gavin is registered to transact securities business in the states of AZ, CA, CO, FL, HI, ID, IL, KS, MN, NV, NY, OR, UT, VA and WA.
*Non-deposit investment products and services are offered through CUSO Financial Services, LP (“CUSO Financial”) (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CUSO Financial. Verity Credit Union has contracted with CUSO Financial to make non-deposit investment products and services available to credit union members. Atria Wealth Solutions, Inc. (“Atria”) is not a broker-dealer or Registered Investment Advisor and does not provide advice. CUSO Financial is a subsidiary of Atria.
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