Happy Easter!
APR 2014
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calendar • earth talk • ask a doctor dad’s eye view • nearby nature • movie time SUMMER 2014
Rethinking Your Family’s Financial Future C by Kimberly Carlson
ongratulations! You survived 2013 and all it had to offer, like: pay cuts, job losses, possible medical problems and – even more recently – the holidays. Here we are, in February, looking at our January (read: post-holiday) credit card bills – while knowing that tax-season is looming ahead – and wondering just how we’re going to make good on our New Year’s economic resolutions. Like many of us, you’ve probably already decided that THIS is the year to get a handle on your finances. You aren’t alone; financial resolutions rank number seven on usa.gov’s website under their “Top Ten New Year’s Resolutions.” Past So let’s get back to those credit card bills. They aren’t going to go aw ay any time soon, and until you have a handle on your past spending habits and accumulated bills, you aren’t going to be able to get ahead on your present and future. Sit down and take a good look at your finances. See patterns in your spending habits
that can be changed and do it. For some, that just sounds overwhelming, but it’s really worth it. Matthew Egnew, CPA and Partner, Director of Tax Services at Hansen, Barnett & Maxwell, P.C. in Salt Lake City, Utah, agrees. “My recommendation for families that seem to be struggling to make ends meet but want to start saving … would be first to really get a handle on how they are spending their money and looking for ways to cut back a little.” Start by taking a look at where your money has already gone. It may sound e l e m e n t a r y, but create a list of your monthly outgoing exp enses. And don’t shirk! Include those lattes and ballet lessons. Every bit counts. Once you have a “bottom line” compare that with your actual net income and see what wiggle room you have – if you have any at all. f i n d
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Present Now that you know what you spend and where, you can truly get a handle your needs versus your wants. Egnew reminds us: “I have read multiple articles and information regarding people of all income levels that are able to build a solid financial foundation. I think it is important to realize that no matter how much money people make, people tend to spend whatever they make. Without a plan, even people that make lots of money aren’t able to save and struggle making ends meet.” So take another look at your monthly bills. Reevaluate it with a fresh pair of eyes. Does your child need ballet? Can you truly afford both soccer and baseball this year? Be honest with yourself: do you really need that extra latte? Are you actually using that gym membership? Essentially, Egnew explained, the general mindset is that the amount of money you make will make you wealthy. This is a bit of a misconception – or, old-fashioned. “[T]the real answer is not how much they make, it is how much they spend. If we plan our spending
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correctly anybody can build a solid financial foundation.” Future Now that you’ve found what you can and can’t do without, and how much that costs, Egnew “r e c o m m e n d [ s ] s t a r t i n g a n emergency savings account first.” The general rule of thumb is to have approximately six months-worth of income saved up for emergencies. “Once the y feel comfor table with how much they have in an emergency savings account, they can start looking at retirement options such as using their employers’ 401k plan or contributing to an IRA plan (either Roth or Traditional).” Egnew recommends taking advantage of employer-matched retirement plans. “This is free money to the employee.” Children’s Future And what about college? Despite our best efforts, our children won’t stay young forever. In addition to contributing to a retirement plan for yourselves, you should also continued on page 2…