Event Recap: Fix My Finances

On January 24, we heard from Johnathon Opet of Embrescia Wealth Management Group to start the year off by Fixing our Finances. 

Do you always feel some stress at the start of a new year? It seems like after the ball drops, many people start looking at certain aspects of their lives a bit more closely and finances usually top that list of focus areas. 

“Typically, every year you go to the doctor and check your physical health. What people typically don’t do is spend time each year assess and check in on your financial health," said Johnathon Opet of Embrescia Wealth Management Group.

Johnathon helped us kick of the year by Fixing Our Finances and was a great resource for the attendees to get some guidance and ask questions about their finances in an intimate setting. 

Johnathon walked us through the Four Box Approach his firm focuses on.

When most people think money, they think of cash - basically any monies that are accessible at any time. This includes cash on hand, your bank accounts, liquid assets, and "rainy day funds" you may have.

Income is the money that you have the least control over. Your income from your job or jobs. 

Investments are truly the key of the four box approach. If you're anything like me, when you hear the word investments you get a big scared. I immediately start thinking about Wall Street, the stock market, men in suits, and words I can't wrap my mind around. But, Jonathon made it super simple! In the Four Box Approach, investments are the ways you "pay yourself first." This includes your retirement fund - whether that be a 401(k), a 403(b) or other plans our employer provides. It also includes any personal investments you're making.  

The final box is your Legacy box - one which most of us dread thinking about. This area focuses on the legacy of your money trail... basically, what will happen to your monies after you're no longer around to manage them.

Attendees asked some great questions surrounding these boxes - ranging form credit cards to student loans. I personally LOVED Johnathon's statement about "paying yourself first." When I heard this, I immediately thought of simply putting money into your savings account, but for Jonathon and his team, it's all about the investments. 

If you set up your retirement fund to auto deduct a percentage from your paycheck, you're paying yourself first - always! 

Here's some quick tips from came from our chat with Jonathon about the Four Box Approach: 

  • How much should I have in my savings account at any given time?
    • Johnathon and Embrescia Wealth Management encourage their clients to have 3-6 months of expenses in their savings account at all times. There are variations between people, though, so if you feel more secure with more money saved up - do what's best for you!
  • What is the most effective way to use credit cards? 
    • Credit cards to fall into the 'cash' box because, even if it's not money you have at the moment, it's money you have access to. Johnathon was honest about "the dance" we all do with credit cards - you want to use them... but not too much. Building credit is vital for larger life purchases, such as a house, but if you're putting yourself in debt over unnecessary spending then you're using your credit card all wrong. 
    • When first looking at cards, Johnathonrecommended looking for cards with 0% APR entry to allow yourself to carry a balance for the first year to year and a half - a little safety net if you need it! With 0% APR, you won't be paying interest on any balance left on the card. Always watch the terms and conditions, though, because some cards only offer this perk for a specific period of time!
    • Are you looking into just beginning your journey of building credit? Jonathon recommends your first credit card come directly from the bank you're using for day-to-day banking. By using your bank to build credit, it's (generally!) pretty easy to get access to a credit card and building a higher credit limit. After your first credit card, though, Jonathon recommends looking into a "secondary" credit card through a company like American Express or even a credit card from a store you love -- as long as you can pay it off!
  • Help! I'm hesitant to put money into retirement because I feel like I need that money now.
    • Johnathon was totally sympathetic to this statement - we all want some extra money immediately in our pockets! However, he recommends putting AT LEAST the amount your employer can match into your retirement account, because you're then benefitting from free money! If you put 1% of your paycheck into retirement, but your company will match 2.5%, you're missing out on an extra 1.5% of extra dough in your pocket.. eventually!
    • The other point Johnathon made was regarding Social Security. Again, if you're anything like me, this term makes you cringe. It immediately starts to make my head spin. No worries, don't get this part scare you, Jonathon just wants us all to be weary of the fact that our generation may only get around 75% of the Social Security we could be entitled to based on who and how many people will be paying into it at that time. So, even though it can stink to put money in retirement now, it does make you risk averse to the iffy Social Security system and guarantee you'll have money later in life!
  • Life insurance?!
    • My eyes got SO WIDE when Jonathon mentioned life insurance. What?! I'm only 24! I will say - Johnathon made this a lot less scary then I would have thought. There are life insurance policies that cover healthy young adults for less than $20 a month. The best part? It can cover your student loan payment. Student loans are a tricky business. If something were to ever happen to you before your loans are payed off, they simply defer on to the next person... whether that be your spouse, your parents, or your siblings. By getting life insurance, you can have a better control over any risk that runs alongside your student loan payments.

Don't miss our Self Care event in February! Teaser: there will be animals involved... see you there!

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