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Be Wise With Money
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Five Key Questions
November 3, 2014 | Rachel Machacek; excerpted from Thrivent magazine
Discuss financial goals to live the life you want
If there's one certain thing in life, it's that things change. You will move in and out of jobs. You may or may not get married. You might or might not have kids. Maybe you'll go back to school or put someone else through college. You likely will retire at some point.
Wherever you are in life, it's worth asking, "Am I doing what I need to do financially so I can get where I want to go?" Here are five questions you can (and should) ask at any point in your life.
1. Am I living within my means?
Actually, get used to living a little below your means so you can save enough. "The key is to set a limit," says Vicki Thorpe, a Thrivent Financial representative in Fredericksburg, Virginia. For instance, decide what you want to give to your church and favorite charities, put at least 10% of your income into savings, and then commit to live off no more than the rest of your income.
2. What are my means?
Do you know how much money comes in every month? Do you know what expenses are necessary? Tracking each and every thing you spend money on creates a clear picture of where the money's going, so you can make changes if you need to.
3. What if...?
This question is about protecting yourself and your loved ones. What would happen if you were to die unexpectedly? What if you live longer than you think and your retirement savings don't go that far? What if you're unable to work tomorrow? Do you have plans in place to help make sure you can take care of yourself and others who may need your help?
4. Am I taking advantage of all of my options?
"[Some] people aren't taking advantage of their 401(k) for a variety of reasons. And others aren't seeing if they qualify for Roth IRAs," says Mark Gottschalk, a Thrivent Financial representative in Midlothian, Virginia. "One that I see a lot is business owners not taking advantage of SEPs, or simplified employee pensions." Or, ask your friends and family how they save money – it could be that easy to find ideas you can use.
5. What if something happens to me?
Every five years, or whenever you go through a life transition – new job, baby, death of a spouse, divorce, retirement – it's time to look at a few things. Who are your beneficiaries for your retirement plans, savings and investments, and insurance contracts? Who is the executor of your will? Have you appointed a power of attorney and do you have your medical directives in place? One of the best things you can do for your family is to have your financial house in order.
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Thrivent Financial and its representatives and employees cannot provide legal, accounting, or tax advice or services. Work with your Thrivent Financial representative and, as appropriate, your attorney and tax professional for additional information.