How to determine livable, healthy financial boundaries.

It’s a helpful key to financial wellness.

As a financial advisor, I enjoy helping people reach their financial goals. In my 40 plus years of experience, there are three areas that I encourage my clients to prioritize in financial planning and goal setting. They are holistic planning, consistent budgeting, and protection planning to help keep you and your loved ones in the lifestyle that you envisioned, now and in the future.?

One of the biggest problems that people share with me is overspending. This is spending out of their actual budget by using credit and paying the balance overtime with interest which accumulates more debt.?This worsens when they experience emergencies and opportunities, which require them to spend money.?This usually prevents people from reaching their overall holistic planning goals.

Whether you share this experience or want to avoid it; there’s hope and a place to start.?

Proactively determining livable financial boundaries is key to your living a thriving and fulfilling life.

?Living within the means of your paycheck is a discipline that sometimes needs professional help.?Here’s how you might start.?You identify an amount to set aside (aka save). Maybe in the beginning you start with 5% towards savings. But being able to save between 20% and 30% is optimal. Remember, that money that's being saved is being put aside for emergencies, opportunities, and being sent forward to meet the needs of the older person you're going to be one day.

But your unique situation is specific to your day-to-day experiences.?So, if you look at this and you think and ask, okay, I’m interested, I’d like to adopt this practice to be able to take money from what I earn and pay myself first, but how??What do I need to do? Where should that money go? I can help with that.

Here is a simple holistic financial planning concept.

Liquid Assets is cash or money that you can get within 2 days or immediately. You pull money out of this with no penalties for withdrawals. But the money is taxable, as it’s accumulating.

Tip: My recommendation is that you work towards saving between 4 to 6 months’ worth of income. Your end goal is saving one year's of income, but 4 to 6 months would set you up nicely.

Retirement programs at work:?This might be a 401(k), a simplified employee pension, a tax sheltered annuity, SIMPLE IRA, or a 403 (b). You contribute by payroll deduction, on a pre-tax basis.?Most employers will offer a match available between a quarter to a dollar for every dollar you put in up to a specified amount.

Tip: My recommendation as at a minimum, you want to contribute to whatever your employers matching and then go from there.

Roth IRA or traditional IRA are additional retirement savings vehicles that you may be able to utilize. Your contribution to a Roth IRA cannot exceed the amount of your earned income (compensation income) that you received during the taxable year. The amount may be further limited if your "Modified Adjusted Gross Income" ("MAGI") exceeds certain amounts. If you do not participate in any employer-sponsored retirement plan, you generally may fully deduct your traditional (non-Roth) IRA contributions. Even if you have already participated in your employer-sponsored retirement plan at work, you may still be eligible to deduct your contributions to a traditional IRA subject to your MAGI and filing status.

Tip: I recommend that you take full advantage of your eligibility in contributing to these retirement savings vehicles and diversify your contributions. ?One thing to caution about is that you should generally not take any money out of your retirement accounts whether that is your employer-sponsored retirement plan or an IRA as funds you saved in these accounts are for your retirement use and premature distribution of these funds may not only cause you to pay income taxes, but also subject you to an IRS early withdraw penalty if you’re under 59 and a half. Please consult your tax professional for any tax advice. And always keep in mind the effect of taxes, especially in a time of emergency.

Financial Products may include investment products that involve risk to the principal values. This compartment is usually used when the other four boxes are filled. This box is important because it offers you the opportunity to participate in the financial market for potential growth over time for your investments outside of your retirement accounts.

?Tip:?Always make sure that your investment fits your risk tolerance and investment objectives.

Life insurance provides valuable death benefit protection for your loved ones. It gives you peace of mind while you're alive, and the necessary financial support for your loved ones when you're gone. It is one of the foundational pieces of any sound financial portfolio. Now, as long as we wake up, go to work and are healthy, we can fill these other boxes up. But should we be taken suddenly, the people that depend on you; your family members, business partners, significant others, will be without your financial support.?That’s why we purchase life insurance to protect the loved ones and the people that are important to us, so that they can continue to have the same lifestyle and continue to pursue their goals even when you are no longer there to provide for them.

Now remember,?in the beginning I shared the goal, of putting ?between 20% to 30% ?off to the side for emergencies and opportunities and to meet the older person you’ll be one day.??You decide where the money should go.?Or, a financial advisor, like me, can help you decide where that money would go.?I recommend that you diversify whatever those dollars are and complete each of these compartments. So, this way, when an opportunity or an emergency comes, will have the liquid fund ready.

I feel that the more people that are exposed to this process the better our communities will be!?Please share this to spread the knowledge.

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Louis Ventura (CA. Insurance. Lic. #0618897) is an Agent of New York Life Insurance Company, a Registered Representative with NYLIFE Securities LLC, member of FINRA and SIPC, a Licensed Insurance Agency and a New York Life company.?Louis Ventura is also a Financial Advisor with Eagle Strategies LLC, a Registered Investment Adviser and a New York Life company. LOUIS VENTURA INSURANCE AND FINANCIAL SERVICES is not owned or operated by NYLIFE Securities LLC or its affiliates.

Financial planning services are provided through Eagle Strategies LLC, a Registered Investment Adviser, and a New York Life Company.

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