Thinking about your money lately?

Life’s busy pace often takes the intention out of the mix when it comes to things like money. In fact, a majority of Americans believe they’re financially literate, yet, a recent Standard & Poor’s survey ranked the U.S. No. 14 globally in terms of its citizens’ financial literacy with just 57% of U.S. adults financially literate.

But, in part due to the changes in our world of late, people have started to talk more about finances. For example, Eric and Sara had two kids, and within the last few years moved into a new home. Both Eric and Sara worked full-time, contributed to their employer 401(k) plans, and had started saving for their kids’ college. And, they had some additional savings they’d accumulated. Recently, like many during this time, Eric and Sara were both working from home. Over coffee, they started to talk about their finances.

Yet, during their discussion, they realized they weren’t really sure if they were saving enough. They didn’t really know what they needed for the kid’s college, their retirement or for some of the goals they had for home improvements. Not sure if they were on track or not.

Let’s take a moment to think about the difference being intentional can make…

What if you decided to go to the nearest college to get your degree and didn’t give it, well, much additional thought?

Versus--thoughtfully considering where you want to go to college and why you may want to go there. With thoughtful research,  you’d likely consider which colleges have the degree program you are interested in, how they are ranked among other colleges with your program of interest and what your proximity is to the college. Perhaps you even review how the costs compare among the colleges that offer similar choice. Then, you might go on a college visit, and if you like it, you apply to get in, not only to one school but to the several you are interested in.

Which do you think has the better chance of providing you with a more successful result? A search that is thoughtful and intentional or choosing based on just one attribute such as proximity?

How about gardening? I’m not an avid gardener but each spring I’ve prepared and created a garden. There have been years in which I have diligently watered, organically fertilized, pulled the weeds and watched it blossom. Years when I had a goal in mind of how I wanted it to look and tended to it regularly to make it happen. But, in the years when I didn’t take the time to think much about it, things turned out a bit different. When I wasn’t intentional with my garden, I haphazardly watered, didn’t pull the weeds regularly, didn’t plan it out and the result was just as you might think, a garden without many blooms!

Successfully navigating toward your financial goals begins with making your financial decisions more intentionally.

How do you do that? It begins with educating yourself on your own personal financial situation as well as beginning to learn what you don’t yet know. So how might one do that?

Let’s start with a short financial literacy quiz:

Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy:

1. more than it does today
2. exactly the same
3. less than today

What is the average amount a 65-year-old couple can expect to spend on healthcare and medical in retirement?

1. $ 50,000
2. $105,600
3. $160,000
4. $285,000
5. $800,000

What percentage of Americans today have basic estate planning in place such as a will or trust?

1. 22%
2. 58%
3. 30%
4. 48%
5. 32%

If interest rates rise, what will typically happen to bond prices?

1. Rise
2. Fall
3. Stay the same
4. There is no relationship

We’ve created this quiz, not because we think it’s all you need to know, but because it includes a few basic concepts that we think you should grasp, especially today.

1. Be aware of inflation’s impact on your money.
2. Healthcare costs may share a large part of your retirement nest egg.
3. Basic estate planning such as a will and trust shouldn’t be ignored.
4. Bond prices react to interest rates and can rise and fall in value depending upon not only defaults but also movement in rates.

We hope you’ll take a look at other articles on our website. We write with you and your financial wellness in mind. Also, check back soon as we’ll share MyBlocks– your building blocks toward financial wellness! Interactive and fun!

Quiz answers: 3,4,5,2

Important Note: The views expressed in this post are as of the date of the posting and are subject to change based on market and other conditions. This post contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Please note that nothing in this post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and should not be taken to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Lenity Financial, Inc. unless a client service agreement is in place.

Sources:  

https://gflec.org/wp-content/uploads/2015/11/3313-Finlit_Report_FINAL-5.11.16.pdf?x491600

https://www.kiplinger.com/article/retirement/T047-C032-S014-most-think-they-know-more-about-money-than-they-do.html

https://www.plansponsor.com/estimates-health-care-costs-retirement-continue-rise/

https://www.caring.com/caregivers/estate-planning/wills-survey

Lenity Financial, Inc.