#94 – Simple Year End Tax Strategies That Could Pay for Christmas

Plus Why Time Travel Could Ruin Your Life

In this episode I’ve got a ton of great things to share with you – everything from a super announcement about our second annual “Retirement Plan LIVE” event that will be going on, to a quick definition and discussion of capital gains and dividend distributions, Christmas planning and tax savings, a conversation with a great […]

Studio shot of a baby boy sitting with a laptop


Originally found on: GOBankingRates.com

From your first home to your first child, life can present challenging financial hurdles. One bad debt can derail your savings strategy while retirement age looms ahead. But a financial planner can help you get back on track by offering solutions compatible with your lifestyle, finances and priorities. Here’s a story of how one financial advisor helped a couple more than double their savings.

Read: 30 Times You Should Have Asked for a Financial Advisor’s Advice

One Couple’s Journey to Saving More

financial_planner2 (1)

Meet Mark and Chelsea, a married couple in their early 30s. They had stable jobs. She worked as an administrative assistant and he worked as a marketing coordinator. Monthly expenses included payments for car loans and credit card debt.

Mark had a small individual retirement account, and the couple had saved a bit of money. But they knew they needed to improve their finances because they planned to buy a house and start a family.

At first, Mark and Chelsea didn’t know if they could trust a financial planner. But a friend of Mark’s parents suggested they meet with Roger Whitney, a certified financial planner with WWK Wealth Advisors. During an initial one-hour consultation, Mark said they were advancing steadily in their careers and received periodic promotions and bonuses. However, they wanted to work with a financial professional “so they didn’t screw it up,” recalled Whitney.

Consulting a financial planner is also a matter of efficiency. Working people like Mark and Chelsea are busy. Melissa Thomas, owner of Melissa the Coach Financial Coaching, noted that “financial professionals save a client time. We know the info and teach it to them instead of them having to spend time learning.”

The Different Types of Financial Advisors

You might think that only people with a high net worth need financial guidance. On the contrary, some advisors actively seek out millennials like Mark and Chelsea in the early stages of their financial lives to nudge them in the right direction. And dozens of online companies — like Betterment, Wealthfront and LearnVest — provide affordable and automated investing services.

The major investment houses are also expanding services to include robo-advising. Charles Schwab offers Schwab Intelligent Portfolios, for example, which combines the convenience of automated investing and re-balancing while giving members round-the-clock access to in-house investment professionals.

Read: 10 Things You Need to Know Before Choosing a Financial Planner

If you want a more traditional advisor, you’ll need to know the difference between a CFP and a financial advisor, what services they provide, and at what prices. Some advisors are fee only and are listed with the National Association of Personal Financial Advisors, while others earn commissions based on what products their clients buy. The range of services that a financial professional can offer run from basic planning — which is what Whitney’s clients needed — to formulating complex investment strategies.

Your First Steps to an Effective Budget

Mark and Chelsea were motivated to improve their finances. This was key, Whitney explained. If only one spouse was committed to the financial planning process, no plan could succeed.

Because Mark and Chelsea did not have joint bank accounts, Whitney said their first task was to merge their money and close unnecessary accounts. Afterward, the couple tracked their expenses for two months.

You’ve likely heard this advice a million times: You must record every dime you spend, tracking it on paper or using an online program like Mint. Doing so allows you to account for rent and other fixed expenses in your budget, plus all those after-work happy hour drinks. It’s a dreadful and tedious task for most people, but it’s important. For Mark and Chelsea, tracking their spending allowed them to categorize their expenses and determine how much money they needed each month for “lifestyle spending.”

Why Traditional Budgets Are Restrictive

According to traditional budgeting methods, you assign everything to distinct categories. For expenses that occur once a year — like a vacation — you take the cost, divide by 12, and plug that number into your monthly budget. You then determine how much you’re allowed to spend each month in each category, such as for entertainment or food.

While some people love tracking and comparing their actual spending against their budgets, others dislike feeling constrained. You might even feel guilty if you’ve blown out a category.

Read: 10 Ways to Take the Fear Out of Budgeting

Budgeting Without Categories

Budgeting doesn’t mean you need a restrictive list of categories. Here’s what Whitney suggested to Mark and Chelsea:

  • Deposit your entire take-home pay into your main savings account rather than into the household checking account.
  • Once a month, transfer your total lifestyle spending budget into your checking account.
  • Once a week, talk and update one another about anticipated expenses.

If the two felt a financial squeeze at the end of the month, they would have to spend more conservatively. However, they didn’t have to starve if the account balance ran low. Whitney said they could transfer money from the savings account to make ends meet.

Mark and Chelsea were advised not to move funds around unless they discussed the decision first, however. They needed to understand why they came up short but without blaming each other. Perhaps the fixed amount needed to be adjusted. In the end, the categories didn’t matter — the overall amount they each spent did.

Read: Why You Need a Spending Plan — Not a Budget

While some think that people in their 30s like Mark and Chelsea aren’t consistent savers, a T. Rowe Price study showed that millennials who contributed to their 401k accounts were doing at least as well as their baby boomer counterparts. With Mark and Chelsea’s new method, their salaries and bonuses went straight into savings instead of being gobbled up in the household account.

Where to Put Your Savings

During a brief follow-up call, Whitney advised Mark and Chelsea to calculate their net worth twice a year. They also allocated money for an emergency fund, a vacation fund and their future home purchase. Anticipating these expenses meant the couple would be less likely to tap their savings. It also meant they had clear goals to keep them motivated as they saved money each month.

Read: How to Manage Your Flexible Expenses

Taking an Active Role in Your Finances

After several months, Mark and Chelsea proudly reported to Whitney that they had more than doubled their savings after implementing what Whitney dubbed the “lazy man’s method.” But the couple didn’t succeed by blindly following a plan their advisor pushed. Instead, they succeeded by taking an active role in managing their finances. Mark and Chelsea’s professional financial advisor simply honed in on a course of action and ensured the two tailored the specifics.

Unsurprisingly, Whitney uses this budgeting method to keep his family’s spending in check. No doubt your own finances could also benefit from this form of conscious spending and saving.

Appearance: How This Couple Used “The Lazy Man’s Method” to Double Their Savings

#93 – How to Be Happy: It’s Easier Than You Think

Dr. Sonja Lyubomirsky Shares The How of Happiness

Hey there all you retirement-interested listeners out there, welcome to another episode of The Retirement Answer Man with yours truly, Roger Whitney. I’m so thankful you’re taking the time to listen today and want to do everything I can to make that investment of time worth your while. On this episode I have a great […]


#92 – Bye Bye File and Suspend: What You Need to Know

Hello there and welcome to this show notes page for episode 92 of the Retirement Answer man.  I’m Roger Whitney, THE Retirement Answer Man, and on this episode I’m shaking it up a bit; throwing in some new segments that I believe are going to simplify and energize your retirement planning. I’d love to hear […]

RAM 92

#90 – How to Answer The Question, “When Can I Retire?”

Listener Questions

Hello friends, Roger here. Today’s podcast is going to be a bit unusual, but not too unusual. I’m going to be answering listener questions about the question I’ve been dealing with all month long, “When I Can I Retire?” We’ve got questions about taxes, balancing portfolios, average expenses for the various stages of retirement, and […]

Listener Questions

#89 – 5 Impacts Longevity Could Have on Your Retirement

You know, there’s a lot of talk these days about the human lifespan being extended because of medical breakthroughs. Is it really going to happen? I tend to think that it’s likely just because of all the advances in nutrition, medicine, and even DNA research. If it does, what are the impacts that living longer […]

Image for Episode 89

#88 – The 6 Biggest Expenses During Retirement

and How to Manage Them

Hey folks, Roger here… Do you know what the 6 biggest expenses are that you’ll face during retirement? In this episode of the Retirement Answer Man, I want to walk through those expenses for a couple of reasons: 1) You need to have a clear picture of where you’re headed so you can be prepared […]

Episode 88

#87 – 4 Myths That Could Ruin Your Retirement and How to Avoid Them

If you’re in your 40s or 50s you’ve probably started to wonder when you can retire and what your retirement lifestyle might look like.  You’re ready to be free from the set schedule of work and have more control over how you send your days. You’re ready to spend more time with your family and […]

4 Myths FB Ad Hands

#86 -You Are Enough For Today

How to Keep a Long-Term Perspective in a Volatile Market

This episode of the Retirement Answer man is filled with some debt-crunching, retirement building, volatile market enduring advice to help you put your financial life in order. The feature segment of the show features the story of Jamie and Ruth, a couple who paid off over $83,000 in debt in just over 30 months. 30 […]

Stop Stressing About Retirement