Decide to Own Your Financial Future
Everyone has a financial plan, whether it has been carefully and thoughtfully planned out, or it is just happening by accident. Deciding to own and be intentional about your financial future is the first step to having greater peace of mind. Once you make that decision, we can help you get on the path toward making your goals a reality.
You are the only “you” there is. Your financial plan has to be as unique as your fingerprint.
Start an Ongoing Conversation
It is true that a woman with a purpose is unstoppable, but even the most high-achieving among us needs a good sounding board. Having someone to really listen to you and ask the right questions can help bring your purpose, values, and goals into sharper focus.
We realize that revealing your entire financial life to another person is not something you do every day, so it is reassuring to know that the guidance and clarity your advisor provides comes with zero judgment and zero pressure. And, you can be confident in the fact that your advisor is bound ethically to act solely in your best interest.
As the conversation continues, you will make all of your financial decisions. Our role as your financial advisor is to keep you focused and informed on the choices available to you so that you understand how every financial choice you make impacts your goals.
Financial Personal Trainers
To put it plainly, our role is to listen to you and gain a complete understanding of what you want your future to look like, and then, coach you all the way there. In fact, that is the best way to think about our role. We are personal trainers who encourage and coach you into a better financial future.
This case study reflects the combined experience working with hundreds of clients over the past 20+ years. It does not represent any one Bridgeworth client, but serves as an example of the benefit of planning. As Dwight D. Eisenhower said, “plans are useless, but planning is indispensable.”
Allison, age 50 and Chris, age 55, were married for 22 years. It was Allison’s only marriage and Chris’ second marriage. They had no children of their own, but Chris did have 2 adult children from his first marriage. Allison worked full-time early in their marriage, but had done volunteer work in more recent years. Chris was the family’s Chief Financial Officer (CFO) and handled all financial paperwork and decisions. He paid the bills, handled insurance and employee benefits elections, and invested their retirement accounts. Allison trusted Chris and was happy for him to take charge of the family finances because they were not particularly interesting to her.
Sadly, Chris was diagnosed and died from cancer. Near the end of his life, Chris was so sick he was no longer paying bills and Allison was so consumed with his medical care that she did not recognize bills needed to be paid. After Chris’ death, Allison was grieving deeply, but still had to respond to phone calls from American Express about outstanding balances and late fees that had not been paid. At the recommendation of a friend, Allison contacted Bridgeworth to get objective advice about how to answer the many financial questions she had. Numerous family members, friends, and even people at the hair salon were telling her what to do, but that advice often conflicted and Allison was not sure these individuals had the knowledge to provide her with the best advice. It was important to Allison to find a partner she could trust to help her through this transition.
At our first meeting, Allison brought copies of all the financial statements, including bank and investment account statements and bills, and we helped organize the papers and create a net worth statement outlining what she owned and what she owed. We then talked about the accounts she could access now and the accounts she could use later for retirement. Because paying bills was a high priority, we worked with her to make sure there was enough cash in the checking account to cover expenses over the next few months. We also helped her complete paperwork to file for the life insurance benefits that Chris owned personally and the coverage provided by his employer. At the end of our meeting, Allison left with a better understanding of her financial situation and peace of mind that she could pay the bills and did not need to start looking for work immediately.
When we met next time, Allison brought in more paperwork she received that she wanted to review. She had to make decisions about what to do with Chris’ 401k retirement plan with his employer and with his Individual Retirement Account (IRA). Allison was listed as Chris’ beneficiary on both the 401k and IRA, so we assisted her with transferring those accounts to her name and name her niece and nephew as beneficiaries. We also helped her to set up online access to her bank account so she could quickly check her balance to make sure cash was available to pay monthly expenses.
At our third meeting, we created financial planning projections with Allison to determine how much she could safely spend each year without running out of money before running out of life. Allison was very worried that she needed to go back to work and was relieved that our projections showed she did not have to earn money. She remains concerned about whether she can afford to keep the lake house, but we encouraged Allison to delay making any decision about selling it until at least 1 year after Chris’ death because grief can cloud the ability to make sound decisions. While some decisions have to be made during grief, we strongly recommend delaying any decisions that cannot be changed later.
Our fourth meeting was focused on explaining the principles of how Bridgeworth invests and why. We then asked Allison some questions to better understand her willingness to take risk and used her answers to develop an investment plan she understood and had peace of mind about implementing. Because the investment plan is not permanent, we will revisit it at future meetings. We will also continue to educate Allison about investments as she wants to learn more about how her money is working for her.
After each of our meetings, we prepared a summary of what we discussed and listed the action items that Allison’s team at Bridgeworth would handle. Our goal was to take as many things off Allison’s plate as possible so she could take the time she needed to grieve. The notes were a useful resource for Allison later as it is typical to be more forgetful when grieving.
After these first few meetings, Allison felt more in control of her financial situation. We agreed to meet semi-annually going forward as long as Allison would call with any questions or concerns she had between meetings. We will review the financial planning projections annually to make sure Allison remains on track to accomplish her goals. We will also continue discussions about what to do with the lake house and review how Allison’s investments are performing and whether her ability or willingness to take risk has changed.
While Allison has made great progress understanding her financial situation and getting comfortable with it, her journey would have been much easier if she and Chris had done planning together while Chris was still healthy. They could have discussed where important documents, like Chris’ username and password for their bank account, were located and talked about the life insurance coverage Chris had. Our goal in sharing this story is to give you an idea of the issues a woman may face at her husband’s death if he was the family’s CFO and to encourage you to be proactive in your planning. If you were not able to be proactive and instead find yourself in Allison’s situation, Bridgeworth can be a resource to provide objective information and analysis to give you peace of mind about your financial condition.