I sat down with Zachary Taylor, a financial advisor at Living Legacy Financial Group, Inc. to learn the three most important things young families need to know about their finances.
Zachary is in the business of helping people realize their financial potential, but he didn’t start out an expert. In fact, after he graduated from UNH, he faced what felt like an insurmountable debt from student loans and, like many young people, didn’t know how to begin. He made it his mission to pay off every cent of the loans, but he did so to the detriment of his savings and his family’s future. But because Zach’s gone down of a path of what not to do (and has become a financial guru in the process), he finds himself in an ideal position to guide families in the right direction:
1. Your financial situation won’t disappear if you ignore it.
You may have a nagging feeling that your finances aren’t in great shape, but you might choose to ignore the situation or deal with it later. Life’s busy, and it’s easy to push off the things you don’t necessarily want to deal with. Zachary advises: Every day you don’t get organized is a day you’re not preparing for your future and protecting your family. The idea of getting organized can feel overwhelming, but it’s much easier than you think—and there are countless tools out there to help. Just take a breath, contact an advisor and start the conversation.
2. Repeat after me: you control your cash flow.
Every single day you make active decisions about what to buy and what not to buy. We all know the feeling at the Target cash register (what happened?!) after we decided we had to have this or that. It’s hard to admit, but we get to decide if we (or our children) really need something. Setting aside a portion of your earnings can be more powerful than what you get from retirement or investments. Ideally, you should be saving 15 to 20 percent of every dollar you earn, and this is something you can control! Small changes in your lifestyle add up, like swapping your daily Starbucks runs for an at-home coffee.
3. An umbrella fund is a real thing. And it’s important.
Zach likes to call it a “life events fund,” and it’s exactly that. Many people have their eye on the future—the house they want to buy, the vacation they want to take, college or even retirement. But what if something unexpected happens? It’s not fun to think about the worst case scenario. But if a family member can’t work, or if an unplanned expense pops up and you don’t have any savings, all those future plans will be difficult to achieve. Putting money in a retirement fund is important, but if you need it, it can be difficult (and costly) to access. It’s critical to have quick and easy access to money so you can avoid going into debt. Zachary says:
Debt is like an anchor that people drag through life. But the best way to avoid debt is to have adequate savings to deal with the unexpected so you don’t add more, pay off what you have, then cast off the anchor of debt permanently.
Every family’s financial situation is different. But each situation should be treated with the care and attention it deserves.
As moms, we spend so much energy on the well being of our children, partners (and hopefully ourselves!). If you’re not giving your financial future the love it requires, it’s not too late to start. This is not something you have to do alone–there IS help.
Contact Zachary Taylor of Living Legacy to start the conversation: