As your parents get older, they’ll inevitably begin to face a variety of issues that come with the golden years: planning for retirement, estate planning, living arrangements, long-term care, when to give up driving, and others. Often it falls to one or more adult children to step in and help. Below are the steps to take to broach these topics with your parents as they begin to face these issues.
Everything You Always Wanted to Know about Investing (But Were Afraid to Ask)
Investing is kind of like sex: everyone’s doing it, but no one’s talking about the basics. Instead, it’s the sensational aspects that get all the airplay. The result is an essential topic that’s often misunderstood and over-sensationalized. Here we’ll look beyond the facade to tackle the nitty-gritty essentials of investing and provide some practical perspective on key questions.
Setting and Tracking Financial Goals
You’ve probably heard that writing down your goals makes it more likely you’ll achieve them. A recent study even concluded that writing down your goals on a regular basis ups the success rate by 42% — sounds overly precise, but we’ll take the sentiment. When it comes to financial goals, though, we can do more than just write them down. Because they ultimately boil down to hard numbers, we can track our financial goals and measure our progress. As Peter Drucker, dubbed the “founder of modern management,” observed: "If you can't measure it, you can't improve it."
What's Your Money Motive?
Unless you’re Scrooge McDuck and enjoy swimming through piles of cash, money is not an end in itself. Instead, money is a means to something else. Your money allows you to purchase necessities and luxuries, to finance family vacations and evenings out with friends, to feel good about yourself (or even superior to others), and to have some security in an uncertain world. There is always an underlying reason why we value money and use it the way we do. Understanding those reasons—why you earn, save, and spend your money—is where wisely managing your finances starts.
A Little Margin Goes a Long Way
Margin is that space between your normal and your maximum capacity. It’s that cushion in your life between your everyday responsibilities and your absolute limits. It’s that Saturday morning when you sleep in, or your 35-minute daily workout, or your few minutes alone with your cup of coffee in the morning before your kids wake up. Tapping into that margin when needed is fine (and inevitable), but the closer to your limits you live, the bigger the risk of hitting a breaking point. This applies to time, career, and of course money.