The Value of Financial Planning

What can a Financial Plan do for me?

Case 1

By: Christopher Wills, CPA, CFA, CFP

Let’s meet Michael. He’s 30 years old and has a good job. He makes $65,000 a year and has been employed now for almost 8 years. Michael has $10,000 total in his savings accounts. He knows he should be saving more but doesn’t think he can afford it. Each month he tells himself he will start saving more, but the years have been passing by and the accounts have not grown very much.

When we asked Michael things like…

  1. Do you have a set monthly savings plan?

“It seems like no matter how hard I try, I just can’t save. The stock market scares me, and I can’t afford to lose what little I have.”

  1. Do you have a monthly expense budget?

“Not really but I pay all my bills on time, even my student loans!”

  1. How about any credit cards?

“I know it’s important to have a good credit history, I have like $2,500 on a few cards.”

  1. What kind of car do you drive?

“I drive a 2017 Honda Accord and the monthly payment is $350 so I’m not spending much money on a fancy car.”

  1. Do you rent or own your home?

“I have an apartment and pay $1,500 a month so no extravagance there.”

Mike’s take home pay is about $3,500 per month. After his fixed housing and car payment he has about $1,650 per month left to pay for everything else. Most months he is able to make it and he even pays more than the minimum due on his debts, he just never seems to have anything left to save.

Michael needs a Financial Plan and a little coaching to get his finances back on track.

The fact is, in order to replace the $65,000 salary he is used to living on today, at retirement (age 65), in addition to his social security income, Michael needs about $1,800,000 in total savings to last until age 95.

If Mike wants to stop working early, as many millennial’s do, say age 55, he will need to substantially increase the amount he saves each year in order to meet that goal 25 years from now.

Like Michael, most people find it hard to save on their own. Aventine Financial is here to lead, inspire, and transform your financial future.

What should you be saving monthly?

Schedule an initial consultation today and see how we can help.

http://aventinefg.com/contact/

Until next time, all the best!

Chris

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