Client Login
Contact Us
Call Us
Locations

Snowball or Avalanche? Choosing the best debt repayment strategy

Ballast Advisors is a fee-based financial planning firm.  Our financial advisors serving the Twin Cities and Southwestern Florida can help you reach your retirement and financial goals.  Our offices are located in Woodbury, MN, Arden Hills, MN and Punta Gorda, FL.

“Have you enjoyed your money?” And other financial planning questions you should ask yourself in 2021

By Paul Parnell

Photo of Paul Parnell

“Have you enjoyed your money?” This is a question I often ask my clients. Too often I see investors who work and save diligently for a lifetime and yet never actually enjoy the fruits of their labor.  

After a year of life in a pandemic, I’m seeing a shift, and more families are taking time to reevaluate their priorities in terms of how they truly want to spend their time and money. Here are some common questions and points of consideration to reflect on for your personal financial plan.

Have you reevaluated any major priorities?

For example, I have clients say they plan to travel more once things open again. Some desire to move closer to family, to downsize, to retire earlier. Sadly, there have been many stark reminders this year that life is short, and our health is never guaranteed.  I see families that are more reflective on leaving a legacy and making significant changes to their trusts to protect their assets.

Any effective financial plan must take these elements into consideration.

Did the pandemic impact your job or career?

Early retirement, a career change, or job loss means impact to employee benefits that are tied to your long-term goals.

Specifically, Cobra was extended again – for at least another 6 months beyond May. This offers the unemployed more time to find new work and maintain their healthcare benefits – an important component of your financial plan. Accordingly, if you’ve lost your job, you may need to evaluate whether or not you can benefit from rolling your 401K over to an individual retirement account.

Volatility in the markets over the last year impacted executive compensation plans. It’s important to reevaluate your stock options, RSUs, or any additional incentives for consequences.

I am also seeing that, for people who have retained their jobs, many have accumulated more cash reserves than normal. If your cash reserve is beyond the recommended 3-6 months of expenses, you should consider shifting some to longer term investments.

Has your risk tolerance changed?

Risk tolerance often changes when you go through major life events. I’ve heard clients say, “Life too short and I want to retire early,” and they are willing to buckle down and live on less in retirement.

Meet with your financial planner and evaluate your current risk tolerance. Is it enough to maintain a high probability of your assets lasting? Cash and more conservative investments like CD’s aren’t paying much of anything these days. With interest rates so low, and plans for new economic expansion, historically this is a time to be more aggressive. Ensure that your portfolio is balanced to meet your future goals.

How might taxes impact your financial plan?

There are likely some big tax law changes coming over the next couple years. This is the time to be looking at tax shelters and maximizing your retirement plans, if you can. At Ballast Advisors, we also have an affiliated CPA practice, so this is a comprehensive service we may offer our clients.  We work with our client’s other advisors—including accountants, attorneys, and bankers—to ensure the seamless execution of your plan.

Capital Gains tax are likely to increase to historical levels, and this is something to be planning for earlier than perhaps you had planned. It’s something to be watching very carefully.

Questions and Answers

Any successful investment strategy requires getting to know our clients- to understand their dreams, goals and create a complete picture of their financial situation. 

Anytime you have major life change or shift priorities – be they personal or financial –your financial plan needs to reflect those changes. It is equally important to update your estate plan. It’s important to consult with your financial professionals to ensure that you are on track to meet your goals, no matter what life brings.

Whatever your passion is – from travel to grandkids – make sure you build in a plan to enjoy your money.

IMPORTANT DISCLOSURES The opinions expressed herein are those of Ballast Advisors, LLC and are subject to change without notice.  Past performance is not indicative of future results. Nothing contained herein is an offer to purchase or sell any product. This material is for informational purposes only and should not be considered investment advice. Ballast Advisors reserve the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

 The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Ballast Advisors, LLC is a registered investment advisor under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about the firm, including its services, strategies, and fees can be found in our ADV Part 2, which is available without charge upon request.

Financial Planning for Millenials

1 in 4 Millennials are “not sure” how their retirement savings are invested. How do you stack up?

More Personal Financial Planning Resources for Millenials

Managing Bond Risks When Interest Rates Rise

After dropping the benchmark federal funds rate to a rock-bottom range of 0%–0.25% early in the pandemic, the Federal Open Market Committee has begun raising the rate toward more typical…

What is the Fed Taper?

What is the Fed Taper? An economist explains how the Federal Reserve withdraws stimulus from the economy Tapering refers to the Federal Reserve policy of unwinding the massive purchases of…

Data Privacy and Your Financial Planner

              Data Privacy and Your Financial Planner Data privacy week is January 24 – 28, 2022.  Here are some tips to help investors safeguard …

2022 Key Numbers

A popular tool, the 2022 Key Numbers document is a comprehensive list of tax bracket and deductions information to assist you as you consider your financial plan for the year. It…

2021 Year-End Tax Tips

Here are some things to consider as you weigh potential tax moves between now and the end of the year. 1. Defer income to next year Consider opportunities to defer…

1 2 4

What does the economic impact of the novel coronavirus (COVID-19) mean for your financial plan?

This is the question many individuals and families are asking in today’s uncertainty. Aside from the obvious concerns for the health and safety of the community, market volatility is stressful and economic slowdown may be hard on business owners and employees as we navigate this pandemic as a society.

Ballast Advisors, a Registered Investment Advisor (RIA) and fiduciary firm based in the Twin Cities, guides individuals and families to achieving their goals using financial planning and time-tested investment strategies.  We caught up with Managing Partner Paul Parnell to have him answer a few frequently asked questions during this period of financial uncertainty and anxiety.

Will this recession last?

Steep declines in the stock market have often coincided with a downturn in the economy. There are still many unknowns, but since World War II, 9 out of the past 12 Bear markets have resulted in recessions, defined as the market dropping 20% or more from its peak.

“It’s reasonable at this time to prepare for a longer-term recession,” says Paul Parnell. “It is hard to keep emotions out of it, but there are smart steps that you can make now to stay financially sound.”

Should I throw in the towel?

Panic selling or “capitulation” is what you begin to see in these uncertain times, but it is important investors understand some key points.

“If you have a solid financial plan, you’re already prepared for this ahead of time,” says Parnell. “At Ballast Advisors, we work with our clients to have balanced and diversified investment portfolios and we help to mitigate risk depending on our client’s age and stage of retirement. Generally, most people gradually reduce risk as they approach retirement.”

Of course, a diversified portfolio is no guarantee that you won’t suffer volatility, but long-term strategies are based on the idea that financial markets are historically cyclical.

“We start to see very high emotions in times like this, and people are tempted to throw in the towel,” says Parnell. “And while it’s very difficult to watch, capitulation can be a detriment for your entire portfolio. For example, after the lows of 2009 recession we saw markets increase 45-54% from the bottom. If you miss this opportunity, it may impact you forever.” 

What changes do I need to make in spending or saving?

In addition to your long-term investments, Ballast Advisors suggests this is a good time to review your budget.

“Discretionary expenses are the first ones to go,” says Parnell. “If you don’t have to reduce savings, don’t.”  Keeping with the philosophy of buy low and sell high, Paul adds, “Try to increase savings, as long as you have the proper cash reserve.”

With the mandated shutdowns, Ballast Advisors suggests you save money on travel, activities, dining out, and similar activities. You may also find savings by negotiating new rates on services, as companies may rather keep you as a customer than lose your business.

“Typically having 3-6 months, salary in cash reserve is recommended. If you are dealing with uncertainty with unemployment, you should increase that to 12 months,” he says. After that is established, Parnell recommends looking at opportunities to increase long-term investment savings.

“Market downturns are generally temporary.  You stand to make money on dollars you invested in a downturn,” says Parnell. “We saw it happen after 9-11 and in 2009. If you’re a retiree, and you supplement income from your investments, cutting your current distributions can make a big difference when markets recover.”

Emotions and Money

“I love Warren Buffet’s quote on the stock market and investing: ‘Be fearful when others are greedy and greedy when others are fearful’,” says Parnell. “You cannot tie emotions to decisions about money.”

Anxiety levels are high for all investors currently. But it’s important to keep perspective, and he suggests limiting your exposure to media that tracks the market volatility daily. 

“I cannot emphasize that enough to clients, I’d be a nervous wreck if I watched the markets on TV all day, and I am in this business,” he remarks. “We believe in staying well grounded.”

These times are hard, no doubt, however, this is the reason you do financial planning, to plan for the uncertainties in life.  This has worked in the past and it will guide you in the future.

“If you are looking at retirement in 5-10 years, you should be looking for a financial advisor, it’s critical,” says Parnell. “Your portfolio should begin to match what it will look like in retirement.”

For more information on how Ballast Advisors helps clients with personal financial planning, executive benefits, and saving for retirement, see www.ballastadvisors.com/.

 

 

IMPORTANT DISCLOSURES

The opinions expressed are those of Ballast Advisors, LLC. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass.

Ballast Advisors, LLC is a registered investment advisor under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about the firm, including its services, strategies, and fees can be found in our ADV Part 2, which is available without charge upon request.

 

Financial Resolutions for 2020

It’s a new year, a new decade, and the perfect time to renew healthy habits, including those in your financial life. Like any good habit, setting intentions and priorities is important. At Ballast Advisors, we know that our clients who are intentional and diligent about their financial goals have more success. 

You may have already set your big financial goals, like saving for retirement, planning for your child’s education or buying your dream home (And if you haven’t started that process, call us).

But here are some tips for smaller resolutions you can consider trying in 2020 to improve your discipline around your personal financial planning and retirement goals.

Create (and Stick) to a Budget Goal

Okay, this is low hanging fruit, but consider setting a new and unique goal with your budget. “It’s easy for a client to say I want to save more money or trim expenses, but getting specific is key. Pick an expense or determine where you are going to save money,” says Scott Peterson, wealth advisor at Ballast Advisors. 

If you’re someone who generally spends first then tries to save what they can at the end of each month you should consider paying yourself first.  Set a simple savings goal for each paycheck and get that out of the way before paying any bills.  “Maybe you start at $10 a paycheck, maybe it’s $500…everybody is different,“ suggests Richard Juckel, financial planner at Ballast Advisors. “A general rule of thumb is to try and save 15-20% of your pre-tax income. If you have a steep hill to climb to reach your savings goals, start small and work your way up.”

plant growing out of savings jar of coins

Save to the Max

Are you making the most of your executive benefits package? At a minimum if your company offers a retirement savings plan with a match you could be leaving money on the table if you’re not contributing to the plan.  Consider saving at least the amount your employer is willing to match. Saving the matching amount alone is rarely enough to meet most people’s retirement plans, but it’s a great place to start!

BONUS TIP: Save your raise. If you’re fortunate enough to receive a raise throughout the year, consider using the increased income to step up your savings plan.  These incremental savings increases could really add up over time.

Audit Your Autopayments

Set time aside to review anything that is on auto-payment. $5.99 here and $14.99 there add up quickly over time. Do you still need that music subscription or meditation app you forgot you subscribed to last year?

 This is also a great time to evaluate your rates for things like insurance and other monthly services and fees. Are you getting the best rate?

Go to the Pros

There is a load of free content out there to help you improve your financial acumen. Commit to reading a finance blog weekly, or find a podcast. Make it a routine to listen to your podcast during your workout, or on your commute from work.

“On the Ballast Advisors website, we offer free financial tools, calculators and financial education,” says Paul Parnell, wealth advisor at Ballast Advisors. “Or if you’re not using a financial planner, consider a free consultation.”

The process of having a professional review your employer sponsored retirement plan in addition to other investments and savings, can help you determine if you are on track.

“A great oldie but really good book on paying for yourself first and saving is The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko,”  Parnell adds.

Related Post: Financial Planner vs Financial Advisor? Making sense of  these titles and other tips on choosing a financial professional

man holding  mobile phone

Embrace a New Technology

Maybe this is the year you try a new app. There are many great technology services to help you track your spending better. Consider an app like Mint, where you can track income and expenses. This article on Investopedia lists the top personal finance apps in 2019.

Or check with your financial planner. Ballast Advisors clients have a customized portal to review their portfolio online. 

Schedule a monthly reminder in your phone to review your app or portal.

Again, it’s easy to say you want to save more money or trim expenses in 2020, but making intentional and specific steps is key. 

For more information on how Ballast Advisors helps clients with personal financial planning, executive benefits, and saving for retirement, and see www.ballastadvisors.com/. Our financial advisors serving the Twin Cities and Southwestern Florida can help you reach your retirement and financial goals.  Our offices are located in Woodbury, MN, Arden Hills, MN and Punta Gorda, FL.

 

IMPORTANT DISCLOSURES

The opinions expressed are those of Ballast Advisors, LLC. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. These opinions contain references to material provided by third-party sources believed to be reliable but cannot be guaranteed for accuracy.  

Ballast Advisors, LLC is a registered investment advisor under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about the firm, including its services, strategies, and fees can be found in our ADV Part 2, which is available without charge upon request. The opinions expressed herein are those of Ballast Advisors, LLC and are subject to change without notice.

 

 

10 Tips To Help You Save More in 2021

It’s a new year (thank goodness) and the perfect time to renew healthy habits, including those in your financial life. If 2020 taught us anything, it’s the importance of planning ahead. You may have already been working toward your big financial goals, like saving for retirement or planning for your child’s education. However, how you approach these goals may have had to change, depending on how the Pandemic impacted your individual financial plan. 

As financial planners and advisors, we are passionate about helping you set intentions and priorities around personal finance goals. A general rule of thumb is to try and save 15-20% of your pre-tax income. We know that our clients who are intentional and diligent about their financial goals have more success. 

Here are 10 money saving tips you can consider implementing in 2021 to improve your discipline around your personal financial planning and retirement goals.

10 Tips To Help You Save More In 2021

Savings Tip #1 – Set a simple savings goal for each paycheck and get that out of the way before paying any bills. Set it to transfer automatically, so you get used to having less money to spend.

Savings Tip #2 – Evaluate your retirement plan. Once you set your budget, work toward taking that first 15% and invest in your 401K, IRA or retirement account. This habit will go a long way toward building your retirement savings.

Savings Tip #3 – If you’re lucky enough to still see a raise or bonus this year, consider using the increased income to step up your savings plan.  These incremental savings increases could really add up over time.

Savings Tip #4 – If your company offers a retirement savings plan with a match, you could be leaving money on the table if you’re not contributing to the plan.  Consider saving at least the amount your employer is willing to match. Saving the matching amount alone is rarely enough to meet most people’s retirement plans, but it’s a great place to start!

Savings Tip #5 – If you brown bag your lunch vs. eating out, you can save an average of $100 a month. If you invested that money into retirement you could have as much as $103,000 when you retire. (assuming 25 years to retirement, 2.5% inflation rate, and an average of 7% rate of return).

Savings Tip #6 – While you’re cleaning out those closets, consider selling stuff you haven’t used in a year and use the proceeds toward any credit card debt. Don’t forget to check your credit reports once a year for free at annualcreditreport.com

Savings Tip #7 – Set time aside to review anything that is on auto-payment. $5.99 here and $14.99 there add up quickly over time. Do you still need that music subscription or meditation app you forgot you subscribed to last year?

Savings Tip #8 – This is also a great time to evaluate your rates for things like insurance and other monthly services and fees. Are you getting the best rate?

Savings Tip #9 – If you’re not using a financial planner, consider a free consultation. The process of having a professional review your employer sponsored retirement plan in addition to other investments and savings, can help you determine if you are on track.

Savings Tip #10 – There is a load of free content out there to help you improve your financial acumen. Commit to reading a finance blog weekly, or find a podcast. Make it a routine to listen to your podcast during your workout, or on your commute from work. 

Again, it’s easy to say you want to save more money or trim expenses in 2021, but making intentional is key. 

For more information on how Ballast Advisors helps clients with personal financial planning, executive benefits, and saving for retirement, and see www.ballastadvisors.com/. Our financial advisors serving the Twin Cities and Southwestern Florida can help you reach your retirement and financial goals.  Our offices are located in Woodbury, MN, Arden Hills, MN and Punta Gorda, FL.

 

IMPORTANT DISCLOSURES

The opinions expressed are those of Ballast Advisors, LLC. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. These opinions contain references to material provided by third-party sources believed to be reliable but cannot be guaranteed for accuracy.  

Ballast Advisors, LLC is a registered investment advisor under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about the firm, including its services, strategies, and fees can be found in our ADV Part 2, which is available without charge upon request. The opinions expressed herein are those of Ballast Advisors, LLC and are subject to change without notice.

 

Financial Planning for Freelancers

Q&A with writer Kate Racculia

The gig economy accounts for more than one third (36 percent) of U.S. workers — that’s approximately 57 million people — according to a recent article in Forbes. While this cuts across many industries, from part time to full time work, the freelancer faces a set of unique challenges when it comes to financial planning versus the more traditional wage-earner.

Ballast Advisors sat down with client and writer Kate Racculia for a Q&A, to discuss financial planning for freelancers from her perspective. Kate Racculia is a novelist living in Bethlehem, Pennsylvania. She is the author of the novels This Must Be the Place and Bellweather Rhapsody, winner of the American Library Association’s Alex Award. Her third novel, Tuesday Mooney Talks to Ghosts, was published by Houghton Mifflin Harcourt in October 2019. Kate shares her perspective on aspects of personal financial planning, such as budgeting inconsistent income, tax strategies for freelancers, and planning for retirement. Ms. Racculia is a client of Ballast Advisors, a fee-based financial planning firm with offices are located in Woodbury, Minn., Arden Hills, Minn and Punta Gorda, Fla.

Q. Tell us a little about your career path in the freelance writing space?

A. The first time I was compensated for my writing was as a teenager–I was a teen correspondent for my local newspaper, which taught me early on that the freelance life–using my skills with the written word–had value, and I could and should pursue my interests and talents.

But, of course, because neither my life nor my career path has been anything close to a straight line, I went to school for a BFA in illustration and to graduate school, for an MFA from Emerson College in Boston. When I graduated–with a mountain of debt–I found a job as a writer in institutional finance marketing. I wrote my first two novels on weekends while I worked full time, for nearly 4 years in finance marketing and another 4 years in fundraising as a prospect researcher.

Only after my second novel was published, after more than 8 years of full time employment, did I feel comfortable taking the chance on freelance life.

 

Q. What steps did you take financially to make the transition to full time freelance work?

A.I knew I had to move to a more affordable place to live (Boston, I love you, but MAN are you expensive). And I didn’t have a contract for a book–all my books have been written on spec, which means I just wrote them without knowing if anyone would ever buy them. *Not* the most financially sound strategy! (As a very lovely consulting client said to me once, when we were discussing the perils of freelancing: “Girl, there are easier ways to make money.”)

But eventually I learned how to balance other forms of income and other occupations, that float the writing of novels until I have a manuscript that (thankfully) could account for a significant portion of my income.

So now, I work part time 15 hours a week at the Bethlehem Area Public Library, teach writing online for usually 3-4 10 week courses per year and consult on manuscripts for Grub ad hoc, write for freelance local publications, and the rest of my time is left for novel writing (or, right now, novel promotion!). So approximately 70% of what I do actively each week brings in pretty stable income–it’s not much, but it’s stable, a base I can build on. 30% of the week is spent on being a novelist, and that’s a risk and an investment that pays out over time.

Q. A huge challenge of freelance work is inconsistent income. In your writing career, can you shed any light on how you balance these challenges?

A. Diversifying my income sources has been so key. Both in terms of creating my ideal life balance–I like to be busy, and to have lots of things going on that are different from one another–and in terms of cushioning my budget. I do rely on my novel advances for my primary financial stability, but I can stretch those advances out over years because I have these other, more stable income sources to prop up my daily expenses. It’s also key to keep a low overhead life: I rent, don’t have kids. I paid off my car years ago, and don’t have any debt, which my many years in finance–and my first book advance–helped me eliminate. I like to travel, but I’m not a big impulse spender and always watch my budget for incidentals, the little things that add up over time such as eating out, etc. My biggest expenses, after rent and my healthcare and insurance, are probably my cats, who are aging. But I started my freelance life with a big cushion; I was in a position of terrific economic luck and privilege when I made the leap, and so far, so good. Even so, sometimes I’m not sure the uncertainty and stress is totally worth it, but I do love being the keeper of my own days. I love my flexibility and independence, and I’m going to keep living this life as long as I can.

Nest with eggs labeled with the financial planning terms house, pension, 401K, IRA

Q. Another challenge is developing tax strategies when there’s no tax withholding. How has this worked for your writing career? What have you found most helpful?

A. I pay estimated quarterly income, which my accountant calculates as part of my tax package. Though I’ve had a few years when I didn’t pay the estimates; I expected those years to be leaner than they were, and it hurts like crazy to cut that massive tax to the IRS, but at least I have the money to do so. On those years when I have a windfall–I sold my book, or a book was optioned–I very conservatively sock away a portion of the gross in a savings account that I don’t even touch, or try to think about. I take out what I expect to pay in taxes proactively, and then it’s there when I need it.

Q. How have you planned for your retirement goals?

A. Whenever I get a windfall–again, if a book sells or a book is optioned–I put a chunk away to be invested. So instead of a small percentage of weekly salary trickling into my 401k every month, it’s like a deluge every 12-15 months. Again, like the savings account, I put it away, try not to think about it, let that compound interest be my friend.

Q. How do you manage insurance?

A. I do buy my own health insurance, which is kind of a bummer, but, again, I’m lucky: I’m generally healthy, don’t have a chronic condition to manage. So every year I go on the Healthcare.gov exchange, estimate my income, see if I’m eligible for a tax credit, and choose my health insurance. No professional or business liability insurance, thankfully; though the city of Bethlehem does require that I file for a yearly business license (to the tune of $30 or so), which I tack to my bulletin board with pride.

college students at class

Q. Do you have advice for other writers/freelancers/creatives out there who need help in financial management, planning or strategy?

A. Take your time! It’s a marathon, not a sprint. Though it’s not really a race at all to live a particular kind of creative life–like, you’re still a writer if you’re working full time (with benefits) at an unrelated job. I was! For nearly a decade. And those full-time jobs were what put me in the best possible position to take a risk, at the time it was right for me to take it. Diversify your gigs, look for those other sources of income, too, that are related to your passions (for a writer: bookstores, libraries) but may be more stable or dependable.

Be disciplined–when you’re filling your own days, time can really run away from you, so try to make weekly schedules and habits about showing up–for yourself, for your work, for what you’re working toward. Daily walks (it is so critical to get outside and out of your head), friend and family time, TV time, dedicated, regular time in front of whatever you’re working on with your phone on silent in the other room. (And if you can? Turn off the internet.) Keep track of your receipts. If office supplies do it for you (I love ’em), invest in folders and fun colored sticky notes and keep your records as diligently as you can. And don’t be too hard on yourself. It’s very easy to feel alone when you’re, well, literally the only person in the office of one. Check in and see how you’re feeling, what you need. A freelance life is not one size fits all, but a bespoke balance that’s different for everyone.

Q. Where can we follow your work?

A. I’m on Twitter (occasionally) at @kateracculia, Facebook at @kateracculiawriter, and Instagram (with lots of cat content) at @gomezrac.

Financial Planning with Flexibility

Decisions for financial advice depend highly on the individual and must be built to be flexible with the changes that come along. Ballast Advisors strives to provide sound financial advice, backed not only by analysis and research, but by life experience and observations that can offer you a balanced and flexible investment portfolio. 

For more information on how Ballast Advisors helps our clients like Kate, see www.ballastadvisors.com/

 

IMPORTANT DISCLOSURES

The opinions expressed are those of Ballast Advisors, LLC. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass.  Ballast Advisors, LLC is a registered investment advisor under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about the firm, including its services, strategies, and fees can be found in our ADV Part 2, which is available without charge upon request. The opinions expressed herein are those of Ballast Advisors, LLC and are subject to change without notice

 

 

Merging Your Money When You Marry

Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.

Discuss your financial goals

The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children’s college education, retirement). Then, determine which goals are most important to you.

Once you’ve identified the goals that are a priority, you can focus your energy on achieving them.

Prepare a budget

Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents.

Begin by listing your sources of income (e.g., salaries and wages, interest, dividends). Then, list your expenses (it may be helpful to review several months of entries in your checkbook and credit card bills). Add them up and compare the two totals. Hopefully, you get a positive number, meaning that you spend less than you earn. If not, review your expenses and see where you can cut down on your spending.

Bank accounts–separate or joint?

At some point, you and your spouse will have to decide whether to combine your bank accounts or keep them separate. Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees. However, it’s sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it. Of course, you could avoid this problem by making sure that you tell each other every time you write a check or withdraw funds from the account. Or, you could always decide to maintain separate accounts.

Credit cards

If you’re thinking about adding your name to your spouse’s credit card accounts, think again. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other. If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won’t show up on the authorized user’s credit record. But remember, you remain responsible for the account.

Insurance

If you and your spouse have separate health insurance coverage, you’ll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse’s health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You’ll also want to compare the rate for one family plan against the cost of two single plans. It’s a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won’t mean paying a higher premium.

Employer-sponsored retirement plans

If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan’s characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. If your current cash flow is limited, you can make one plan the focus of your retirement strategy. Here are some helpful tips:

  • If both plans match contributions, determine which plan offers the best match and take full advantage of it
  • Compare the vesting schedules for the employer’s matching contributions
  • Compare the investment options offered by each plan–the more options you have, the more likely you are to find an investment mix that suits your needs
  • Find out whether the plans offer loans–if you plan to use any of your contributions for certain expenses (e.g., your children’s college education, a down payment on a house), you may want to participate in the plan that has a loan provision
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019
IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Originally Published Apr 16, 2019

Managing Bond Risks When Interest Rates Rise

After dropping the benchmark federal funds rate to a rock-bottom range of 0%–0.25% early in the pandemic, the Federal Open Market Committee has begun raising the rate toward more typical…

What is the Fed Taper?

What is the Fed Taper? An economist explains how the Federal Reserve withdraws stimulus from the economy Tapering refers to the Federal Reserve policy of unwinding the massive purchases of…

Data Privacy and Your Financial Planner

              Data Privacy and Your Financial Planner Data privacy week is January 24 – 28, 2022.  Here are some tips to help investors safeguard …

2022 Key Numbers

A popular tool, the 2022 Key Numbers document is a comprehensive list of tax bracket and deductions information to assist you as you consider your financial plan for the year. It…

2021 Year-End Tax Tips

Here are some things to consider as you weigh potential tax moves between now and the end of the year. 1. Defer income to next year Consider opportunities to defer…

1 2 4

Financial Planning: Helping You See the Big Picture

 
 

*There is no assurance that working with a financial professional will improve investment results.

Common financial goals

  • Saving and investing for retirement
  • Saving and investing for college
  • Establishing an emergency fund
  • Providing for your family in the event of your death
  • Minimizing income or estate taxes

 

 

 

Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached.

That’s where financial planning comes in. Financial planning is a process that can help you target your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.

Why is financial planning important?

A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you’ll be better able to focus on your goals and understand what it will take to reach them.

One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related–for example, how saving for your children’s college education might impact your ability to save for retirement. Then you can use the information you’ve gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you’ll know that your financial life is headed in the right direction.

The financial planning process

Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:

  • Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
  • Establish and prioritize financial goals and time frames for achieving these goals
  • Implement strategies that address your current financial weaknesses and build on your financial strengths
  • Choose specific products and services that are tailored to help meet your financial objectives*
  • Monitor your plan, making adjustments as your goals, time frames, or circumstances change

Some members of the team

The financial planning process can involve a number of professionals.

Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating the activities of other professionals who have expertise in specific areas.

Accountants or tax attorneys provide advice on federal and state tax issues.

Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death.

Insurance professionals evaluate insurance needs and recommend appropriate products and strategies.

Investment advisors provide advice about investment options and asset allocation, and can help you plan a strategy to manage your investment portfolio.

The most important member of the team, however, is you. Your needs and objectives drive the team, and once you’ve carefully considered any recommendations, all decisions lie in your hands.

Why can’t I do it myself?

You can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered.

Staying on track

The financial planning process doesn’t end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it’s up-to-date. It’s also possible that you’ll need to modify your plan due to changes in your personal circumstances or the economy. Here are some of the events that might trigger a review of your financial plan:

  • Your goals or time horizons change
  • You experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss
  • You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)
  • Your income or expenses substantially increase or decrease
  • Your portfolio hasn’t performed as expected
  • You’re affected by changes to the economy or tax laws

Common questions about financial planning

What if I’m too busy?

Don’t wait until you’re in the midst of a financial crisis before beginning the planning process. The sooner you start, the more options you may have.

Is the financial planning process complicated?

Each financial plan is tailored to the needs of the individual, so how complicated the process will be depends on your individual circumstances. But no matter what type of help you need, a financial professional will work hard to make the process as easy as possible, and will gladly answer all of your questions.

What if my spouse and I disagree?

A financial professional is trained to listen to your concerns, identify any underlying issues, and help you find common ground.

Can I still control my own finances?

Financial planning professionals make recommendations, not decisions. You retain control over your finances. Recommendations will be based on your needs, values, goals, and time frames. You decide which recommendations to follow, then work with a financial professional to implement them.

 

 
 


Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019
 IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice
 
 

3 Tips for Personal Finances During the Holiday Season

Ballast Financial Professionals share tips for your personal finances this holiday season.

(originally published November 2018)

Between holiday gifts, parties and meals — this time of year is one of inevitably higher spending.

No matter what your regular habits are around your personal financial planning, it’s a good practice this time of year to give your household budget a once-over and pay extra attention to your spending.

Even if your gifting budget is unlimited, there are a few reasons an extra eye on your expenditures is recommended.

Professionals from Ballast Advisors share three best practices for personal finances this holiday season.

Tip #1: Plan Ahead

Santa shouldn’t be the only one making lists and checking them twice.

“Plan ahead and stick to your budget,” recommends wealth advisor Scott Peterson of Ballast Advisors, who has twenty-seven years of experience in the financial services industry. 

Consider planning for the not so obvious — smaller expenses like hostess gifts and extra groceries for out of town company can add up quickly, so factor them in advance.

There are even some apps that can help you plan your giving. Santa’s Bag is an easy-to-use Christmas themed shopping app that helps you budget and track your gift giving by recipient.

Ultimately, you can’t calculate where you’re going financially unless you know where you stand now, so cash flow and budget analysis is key.

Christmas shopping list

Tip #2: Shop Early

Even if you’re not a die-hard Black Friday shopper, don’t wait until Christmas Eve to do your shopping, or you will likely spend more.

“Start shopping early,” says Paul Parnell, Founding Partner of Ballast Advisors.  Paul has over twenty-three years of experience in guiding clients and helping them prepare for a sound financial future.

“From personal experience, last minute shopping is much more expensive,” adds Parnell.

Again if you couple this second tip with planning ahead, you’re on track to wiser spending.

Tip #3: Evaluate Regularly

As the saying goes, “the road to Hell is paved with good intentions” —and the same logic applies to your holiday shopping.

Even if you start off with a budget, a plan, shop early — if you don’t actually stick to it, it’s not worth much.

“Don’t wait until after the Holidays to evaluate what you spent,” says CFP®  certified financial professional Richard Juckel, who is responsible for overseeing the advice and wealth management operations and serves on the Investment Committee at Ballast Advisors.

Not only is it important to make a budget, but it’s equally important to track it closely. Hang on to your receipts, spend that extra time entering your spend against your budget.

Unfortunately, this time of year is also a time where theft is on the rise. Keep track of your transactions to be sure there isn’t any unauthorized spending.

These simple steps put into action will help you keep on track this season.

For more information on how Ballast Advisors helps Twin Cities professionals discover their financial needs and goals

 

 

For more information on how Ballast Advisors helps professionals discover their financial needs and goals, contact Ballast Advisors for a complimentary consultation at a location near you:

Ballast Advisors – Woodbury

683 Bielenberg Dr., Suite 208
Woodbury, MN  55125-1705
Tel: 651.478.4644

 Ballast Advisors – St. Paul

3820 Cleveland Ave. N, Ste. 500

St. Paul, MN  55112-3298
Tel: 651.200.3100

Ballast Advisors – Punta Gorda
223 Taylor Street, Suite 1214
Punta Gorda, FL  33950-3901
Tel: 941.621.4015

 Ballast Advisors, LLC is a registered investment advisor under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about the firm, including its services, strategies, and fees can be found in our ADV Part 2, which is available without charge upon request. The opinions expressed herein are those of Ballast Advisors, LLC and are subject to change without notice.