What Can Advisors Do If Their Clients Safety Nets Are Ripping?
10. Devise a Spending Plan for Retirement Savings
While its important to save for retirement, it is also essential for clients to develop a spending plan to determine how potential expenses will be paid. Preparing a hypothetical budget will allow clients to see how their funds will be allocated. While living costs may decrease, health expenses will increase which magnifies the importance of saving now.
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9. Consider a Health Savings Account
A health savings account is an alternative vehicle to comprehensive health insurance that enables people to pay for current health expenses and save for future medical and retiree health expenses on a tax-free basis. Clients own and control the money in a HSA and can decide how to spend the money without a health insurance companys consent. You can assist clients with decisions regarding investments to make the money in the account grow, although the account does have maximum yearly contributions.
8. Refinance Mortgage
As clients evaluate their budgets and try to find more ways to save, review their mortgage because they may qualify for refinancing. Refinancing can potentially save homeowners money each month making their budget easier to handle, and can possibly save clients thousands on interest payments.
7. Avoid Credit Card Debt
Many clients find themselves in financial chaos due to troubles with credit cards. Low interest rates and 0% transfer options are the types of credit cards clients should choose to avoid finding themselves in debt. Paying the balance in full and on time is also a way to maintain control of finances
6. Save, Save & Save
Its never too early (or too late) to start saving, so start as soon as possible! Even if your client starts small with a dollar a day, over time it will begin to add up. Encourage clients to open IRAs or other savings accounts so they may take advantage of the compounded interest rates to prepare for retirement.
5. Track Spending
It is essential that clients with financial woes do not ignore their situation, but rather take steps towards rectification. Reviewing statements, tracking withdrawals and limiting the money spent on credit cards are all ways to conserve spending. Recording spending habits is a good rule of thumb for everyone to follow, not just those in financial trouble.
4. Review Insurance Policies
Encourage clients to review their insurance policies on a periodic basis to determine the ratio of coverage and cost for each niche. Compose a summary for each insurance policy, clearly outlining the benefits and restrictions. Clients will typically find the best coverage and cost-effective plan once they conduct a little research, comparing and contrasting the policies from different companies.
3. Seek Assistance Programs
Dependent upon your clients financial situation, there may be state or federal assistance programs available to help with finances. These programs can help clients experiencing financial hardships by providing them with resources for obtaining financial assistance and saving money.
2. Evaluate Financial Situation
Provide clients with a complete assessment of their current financial situation. A comprehensive review on financial aspects such as savings, saving patterns, investments and future expenses will not only provide clients with a concrete understanding of their current position, but also give them the opportunity to develop a financial plan.
1. Receive Professional Help
Family, friends and anyone that invests will have conflicting opinions regarding the proper way to handle finances. First and foremost, receiving professional help from a financial planner is an invaluable resource, since they take the time to understand their clients unique situation. By helping clients save money in the long run, they will be more likely to spend money at the forefront for consultation services.