5 Crippling Money Moves You Could Be Making Now (Steve Knudson, One of our Financial Advisor’s was quoted)

5 Crippling Money Moves You Could Be Making  Now

By            Stephanie  Taylor Christensen        Jun 26, 2012 11:10 am

Read more: http://www.minyanville.com/trading-and-investing/personal-finance/articles/personal-finance-money-moves-crippling-money/6/26/2012/id/41920#ixzz1zlHoHPGN

MINYANVILLE ORIGINAL  Many people wrongly assume that making more money would solve their  financial woes, but in reality, what you do with your money has far  more impact than the amount of your paycheck.  Here are five crippling  money moves you could be making right now.

Skipping the  financial baby steps to invest. Turn on any news program that focuses  on the markets and the excitement of investing is palpable:  There’s breaking news, scandal, and constantly changing opportunities that allow  your mind to wonder whether this is the big break that will contribute  to an early retirement filled with pool time and umbrella drinks. In stark  contrast, saving and paying off debt is dull, and frankly, a little depressing.  It’s only natural to be drawn to the action of “The Street” — but that desire  could cost you a boat load in the long term.

Financial counselor  Andi Wrenn says that the most frequent financial mistake she sees are potential  investors seeking advice how to get into the market before they’re financially  ready to start investing.  Before you start reading up on the latest investing trends, conduct a bit of due  diligence: Do you know your budget and spending behaviors? Do you carry debts?  How’s your credit health? And do you have a long-term financial plan?

“Unsexy” as these factors are, they encompass financial well-being. If you  haven’t mastered them, the odds are good that you’ll benefit more from managing  what you can control, like resolving debt, building savings, and  knowing where your money goes, than by diving in to investments. Case in point:  Investing will deliver about a 4% to 7% return on your money, if you’re lucky,  says Wrenn. On the other hand, paying down debts that currently cost you money  (and could be as high as 21%) delivers a guaranteed reward in the long-term.

Not staying current on insurance rates and beneficiary  designations. You may have insurance policies, a will, power of  attorney and beneficiary designations in place, but when’s the last time you  checked in on them?  Gerard R. Gruber, CFP and chief investment officer at Hayden  Wealth Management, tells Minyanville that even clients with well-formulated  estate plans commonly have issues with “inappropriately named beneficiaries and  property titling that can cause a significant tax liability for their  estate.”

If you’ve named a beneficiary and your relationship with them  has since changed, check in with your assets and ensure that you’re not naming a  person who no longer fits the bill. If you’ve had a child since you last checked  in on your estate, make certain that they are appropriately named on policy  documents — and that you’ve taken steps to manage your tax liability in the  process. If you carry insurance policies secured some time ago, Gruber says you  may be overpaying. “Clients frequently hold onto old insurance policies with  older mortality tables and that were issued with higher assumption rates. With  mortality rates changing every 10 to 15 years, policies now are less expensive  and more multidimensional.”

Making buying decisions based  on others. Peer pressure to make the certain purchases is all but  unavoidable, especially now that personalized social media algorithms tell us  exactly what our friends are reading, listening to, buying, and coveting. When  it comes to investments, removing your emotions and the thoughts of others is  key to a solid long-term plan.
Season Investments co-founder and portfolio manager David  Houle says that he commonly sees people trying to “proactively manage investment  assets without a rigid process in place. ”  As a result, they react to  headlines out of emotion, and “step in and trade proactively at exactly the  wrong times.” But emotional financial errors aren’t limited to investing. Think  about the last time you bought a product at the suggestion of a friend or  advertisement, adopted a lifestyle change because you read about it in the  media, or even bought a certain type of car or house because you felt like you “should,” having reached a particular age or income bracket. There is a  cumulative effect that goes into all money decisions, and these decisions can  ultimately derail even those who make sizeable incomes. The way to combat them?  Devise a financial plan that maps out current and longer-term goals and filter  out the noise by sticking to it.

Thinking you’re too well  off to worry about savings.  The saying “The more you make, the  more you spend” could be extended to “The more you make, the less you worry  about saving.” But in reality, your savings cushion should be appropriate to  your level of income, and lifestyle. Henk Pieters, CFP and president of Newport  Beach, Calif. based Investus Financial Planning, says that his working/middle  class and wealthy clients commonly discount the need to have a significant  emergency fund.  Pieters recommends that all clients have at least three to  six months worth of living expenses covered in an FDIC-insured savings  account—provided they have a very stable career. Business owners and  those in industries or salary tiers that present higher degrees of professional  uncertainty need to save an entire year’s worth of living expenses.

Not planning for disaster. In 2009, the online  edition of The American Journal of Health published a Harvard study reporting that more than 62% of bankruptcy   is medically related in some way. Perhaps the most concerning aspect of it  was thatmedical debtors were well educated and middle class,  and three quarters had health insurance at the time bankruptcy was filed.” Aside  from having sufficient savings, it’s important to educate yourself about the  insurance coverage you have, and fill in gaps where you find them.

Steven K. Knudson, financial advisor at Intermountain  Financial Group, says that even those with a “Group Long Term Disability” plan at work should add personal fixed income protection in a non-cancellable  disability insurance plan to make sure assets are covered. Additionally he  recommends securing adequate life insurance coverage as early as possible. “With  term life insurance so inexpensive these days, get it while you are young enough  to qualify and it’s cheap enough that you can afford it.”

Twitter: @WellnessOnLess
Read more: http://www.minyanville.com/trading-and-investing/personal-finance/articles/personal-finance-money-moves-crippling-money/6/26/2012/id/41920#ixzz1zlHzixIu


About Intermountain Financial Group, LLC
Our company is built on a solid foundation of excellent client service and in-depth industry knowledge. Our focus is helping you improve your quality of life through financial peace of mind. We offer a wide variety of products and services to help you solve today’s personal and business financial problems and to prepare for the future. For more than a century, the Intermountain Financial Group/MassMutual (IFG) www.intermountainfinancialgroup.com has provided a comprehensive offering of a diverse array of products, including life insurance, annuities, disability income insurance, long term care insurance, retirement planning products, mutual funds, and access to money management to individuals and businesses in Utah and most of United States. IFG currently has offices in Salt Lake City, Provo, and St. George, Utah. IFG has also been recognized as one of the best places to work in Utah by the Work/Life Awards Committee for 2011, 2010, 2008, and 2007 and the national Sloan When Work Works award in 2012, 2011, 2010, 2009, and 2008.

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