In a year when wellness is a topic at the forefront of our minds, it is a good time to evaluate our financial health to see if we could make some improvements. People often focus on their finances when life changes happen or tragedy strikes – but just like an annual check-up with your doctor, it is important to be proactive by reviewing your finances annually versus taking a reactive approach. In over 30 years of being in practice, we have witnessed firsthand how someone’s financial health impacts relationships, marriages, and businesses.
The decisions you make today, will matter tomorrow. So, let us help you get started towards a path of financial health and security by avoiding some common mistakes people often make.
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1. Not having a Financial Security Plan. Just like maintaining our physical health, our financial health requires a plan. Like an effective personal trainer, an effective financial advisor needs to be a stellar listener and motivator. A plan will always start by identifying your goals, vision, and values to build a plan that’s going to work for your life and keep you on-track. It is often said that planning is good but doing is better. Find an advisor that will listen, motivate, and serve as your accountability partner so that you stay committed to your goals.
2. Looking at Investments and Insurance Separately. When looking for a financial advisor, understand something, there are firms that only plan with insurance and firms that only specialize in investments. While that works in theory, it is not the best approach when building a long-term plan. Find a financial advisor that can incorporate both into your long- and short-term plan. Ask if the advisor is a fiduciary, you will want to ensure they are working in your best interest before you hire them. Some advisors can build a plan for a flat fee that you can take anywhere to execute while others will only sell you products without building a plan. Be wary of anyone who you feel is selling a product over an integrated plan.
3. Not Collaborating with Other Advisors. When you engage with a financial planner, ask them how they typically work with accountants and attorneys to build and execute financial plans. A valuable advisor will have trusted professional contacts that they work with often. This is to ensure there are not missed opportunities or mistakes made when planning. For instance, your tax advisor should review your plan annually to ensure you are being as tax efficient as possible. They will also be a key advisor when planning for retirement to map out where your income streams will come from to meet your lifestyle needs for the year. Your attorney will ensure your estate plan and wills are updated based on your life changes and that your financial advisor has a copy in case of an emergency.
4. Forgetting Who Your Planning Will Impact. Planning can take on multiple levels of impact, so it is important as you plan to think multi-generationally and beyond your lifetime. For instance, if you are a business owner your plan needs to address questions like: Who is next in line to run your business? Do you have funding in place in case tragedy strikes? Do you have a buy/sell agreement in place? If you are planning personally you will need to take your family through a “financial fire drill”. This exercise will give family members clarity around the plan, key contacts in an emergency, the appointed person to execute the plan if you are unable, and any gaps in your plan that may require attention. Often people focus on executing their plan but miss communicating the instructions to their family and those who the plan will impact.
5. Not Revisiting Your Plan Annually. As life happens, things change – and so will your plan. It’s important to be proactive when planning and set aside time to review your plan each year. Communicate clearly with your financial advisor how often you would like to review your plan. A trusted advisor should suggest a yearly check-in and hold you accountable to that cadence. Planning never ends, it is not a destination – it’s a journey.
Just like physical health, financial health requires a proactive approach. Surround yourself with professionals that will hold you accountable to your plan, that will integrate insurance and investments into a single plan, and who will help you take your plan to the next level of impact. The time you invest in your financial health will directly impact those around you. Make planning a priority, revisit your plan annually, and collaborate with trusted professionals to help you stay on track. Remember to enjoy the journey and let your family be a part of the ride.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) (life and disability Insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries, including Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), a registered investment adviser, broker-dealer, and member of FINRA and SIPC, and Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and trust services), a federal savings bank. NM and its subsidiaries are in Milwaukee, WI.

Matthew Robert Carothers uses Greater Horizon Financial Group as a marketing name for doing business as a representative of Northwestern Mutual. Greater Horizon Financial Group is not a registered investment adviser, broker-dealer, insurance agency or federal savings bank. Matthew Robert Carothers is an Insurance Agent of NM and NLTC. Investment brokerage services provided as a Registered Representative of NMIS. Investment advisory services provided as an Advisor of NMWMC.

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