4 Tips for Achieving Long-Term Financial Success

4 Tips for Achieving Long-Term Financial Success

As I was working on a client’s financial plan today, I thought one of the recommendations might be helpful for others. Here is the redacted text that made up one recommendation in the cash flow and budgeting section of a client’s financial plan: Our final recommendation vis-à-vis your cash flow and budget is the hardest to implement and the hardest for us to recommend. Successful financial planning ultimately comes down to cash flow planning. Over the years, our most successful clients have developed financial habits that allow them to live below their means. Living below one’s means can mean different things to different people, but it essentially comes down to a lifestyle decision whereby one embraces frugality and eschews the temptation to spend at one’s income level. Given various societal pressures, such habits are incredibly difficult to adopt. Some best practices to aid you in developing these habits are as follows:   Live on a set salary. For example, you could consider setting up your household budget so that you only live on your base salary, and you work toward saving all of your additional household income.  As income increases, avoid the temptation to commensurately increase your standard of living. Save heavily and regularly. One strategy here is to save raises and salary adjustments, and to continue living at your previous income level. Save 20% of gross income, and maintain this savings rate as your income increases over time. One mistake people make is that they often max out retirement plans and think they’re saving enough. However, if maxing out a retirement plan only results in a 10% savings...
Dunston Financial Group Featured in MagnifyMoney.com – 7 Money Rules Freelancers Should Live By

Dunston Financial Group Featured in MagnifyMoney.com – 7 Money Rules Freelancers Should Live By

Dunston Financial Group was recently featured in a short article over at magnifymoney.com. The article is about cash flow management strategies for freelancers and people who are self-employed. The article offers up the following 7 tips: Base your budget on your lowest grossing month Set your lifestyle now Anticipate large expenditures Always plan ahead for taxes Have multiple income streams Save at least a year’s worth of expenses Make sure your money is working for you You can read the entire piece over at...
How Your Relationship Choices Might Dictate Your Money Habits

How Your Relationship Choices Might Dictate Your Money Habits

Writing for CNBC Money, Ester Bloom explains that it wasn’t her financial savvy that helped her save $100,000 for a new apartment while only earning $30,000 a year in New York City. Instead, she maintains, “the most important decision I made was to surround myself with like-minded people, both romantically and socially.” This is interesting. I’ve long known that the core tenets of financial success are simple: Be frugal; save money; and, invest your savings. But what if you’re in a relationship where a partner doesn’t share the same values of frugality, or what if your friends are always encouraging you to spend more? As Bloom asks, “What good is a minimalist mindset, after all, if you’re living with someone who eats out two or three meals a day? Eventually you too will succumb to Seamless.” There are really important aspects of finance and investing that we in the financial advisory business broadly understand to fall under the rubric of behavioral finance. I suppose this would be a good example of a behavioral finance topic. What fascinates me, however, is that it’s not just the individual’s behavioral patterns that have a bearing on one’s financial health, but also the behavioral patterns of those in one’s direct social circle. We often hear of the importance of emotional, sexual, and physical compatibility in relationships, but what about money compatibility? According to Bloom, money compatibility is paramount: This is what relationship advice-types mean when they say to make sure you’re with people who share your values. If you want to be an ant, don’t shack up with a grasshopper. Don’t even go out drinking...
5 Things Couples Should Discuss about Money

5 Things Couples Should Discuss about Money

  Do you ever find it difficult to talk with your spouse or partner about money? When meeting with clients, we regularly find that couples have very different perspectives on money. This is often due to the variegated ways in which each partner’s parents handled money; other times it’s a result of personality, and sometimes it’s due to partners having very different careers and personal interests. In any event, talking about money in a relationship is important, and Ashley Marcin over at Wisebread.com offers up five important questions every couple should be asking: 1. Where Is Our Money Going? 2. How Do We Each Deal With Money? 3. Should We Bank Together — Or Not? 4. How Can We Save for Something Big? 5. What Do We Want Our Future to Look Like? Point number one is important. Financial success begins with an understanding of what’s going on in one’s finances. If one spouse or partner has no idea where funds are or where they’re going, this can lead to relational frustration. To help with this, Marcin suggests that couples find some time to simply talk about their spending patters: Take some time — over candlelight and wine, perhaps — to delve into your check registers and online accounts. Do you see any patterns? Were you both aware that all that money was going toward the groceries each week? Or what about those online magazine subscriptions? Unused gym memberships? You may be able to quickly spot some areas that need work before they turn into shouting matches. Communication is key. Many couples come from families where parents never talked about...