For something that is so foundational to every solid financial plan, “budget” can often feel like a four-letter word. To many, the word “budget” evokes thoughts of what you can’t afford rather than what you can. Our job as advisors is to help our clients identify the goals and priorities that matter most, and to create a personalized financial plan to match, and make your budget work for you.
Budget Basics
In an industry full of tough questions, asking clients what level of income they need in retirement is one of the toughest – and it’s rarely as easy as simply replacing your salary with investment withdrawals. Some budget basics to consider are: line items during working years such as retirement plan contributions, disability insurance, or even mortgage payments can muddy the waters in determining just how much your basic living expenses are costing you. As part of our comprehensive financial planning service, we have great resources for clients who need to dial in their budget in preparation for retirement, or for clients who are working on a savings strategy earlier on in their career. Getting past the initial discomfort of tracking expenses helps you better understand the resources you are working with and assuages a lot of the fear surrounding personal financial planning. These are the foundational steps to making your budget work for you.
The Fun Stuff – Make Your Budget Work For You
Once you’ve started implementing some budget basics (meaning basic living expenses are accounted for in your retirement plan), we can start planning for the things that make you light up when you talk about them. Budgeting isn’t just buying non-organic produce and flying coach on vacation; it’s about making your budget work for you by prioritizing the things that matter most and working with your advisor to allocate your resources accordingly. We can “budget” for line items such as annual gifting strategies to your grandchildren, a travel budget for the first 15 years of retirement, charitable giving to an important cause, or a cabin on the Kenai once your kids are off the payroll. I like to describe our financial planning process as a “choose your own adventure” story and encourage clients to reframe budgeting as a way to prioritize the expenses that matter most to them.
Money is personal, and prioritizing goals is not as easy as it sounds. Our team takes pride in our ability to meet you where you are, and work with you to plan for whatever a solid financial future looks like for you.
Leah Levingston, CFP®
Associate Financial Advisor
6/5/23
Commentary: The opinions expressed are those of Alaska Wealth Advisors Investment Team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward looking statements cannot be guaranteed.
Adviser Disclosure: Alaska Wealth Advisors is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Alaska Wealth Advisors’ investment advisory services can be found in its Form ADV Part 2, which is available upon request.
