Financial Services

There are a few basic steps we need to understand to improve our financial literacy.

First, we need a budget.  Establishing a budget allows us to stay accountable and cover our basic needs and prepare for the future with unexpected needs that may arise.  The basic structure of a budget is as follows.

1. Determine your household monthly income.
2. Review bills and expenses.
3. Reserve some of your income to savings.
4. The balance you have is then available for discretionary spending.

It should be noted that savings should be a part of everyone’s budget.  As kids we may have had a piggy bank.  We saved our money for that toy or outfit we dreamed about.  Now as adults our dreams may have changed but our approach is still the same.  We may need to save to get the things we want, the unexpected, and of course for retirement.  We should also consider building an emergency fund to cover 6 months of living expenses.  If you are unable to save based on your income and expenses you can look at your expenses. One way to budget is your food cost.  Food is a major part of every budget. Look at what you are spending on food. Are you eating out too much? Can you use grocery store circulars to find the best deals?  Analyze the cost of some of your expenses like cable or credit card rates.  You can call companies to find saving for these expenses or reduce interest rates.  If you have exhausted the option of cutting back expenses, then it is time to look at your income.  Is there a way to increase what you bring home?  Can you think of a side hustle to help your budget?  Is it time to ask for a raise at work?  Looking at both sides of this equation can help make your budget healthier and your goals more attainable.

There are options for your savings which depend on factors such as your risk tolerance, the time frame in which you desire to attain your goals and your overall financial health.  Compound interest can change the way your money works for you in your savings plan. Compound interest can be defined as interest calculated on the initial principal and on the accumulated interest of previous savings. Think of it as the cycle of earning “interest on interest” which can cause wealth to rapidly snowball.

Compound Interest will make a deposit grow at a faster rate than simple interest, which is interest calculated only on the principal amount. Time is your best friend and is the one thing that makes compound interest so effective. So, saving now and starting early will pay dividends in your future and help you accumulate extra money. To quote Warren Buffet “My wealth has come from a combination of living in America, some lucky genes, and compound interest,” While saying that savings is important to start as soon as possible it is never too late to start.

There are options for your savings which depend on factors such as your risk tolerance, the time frame in which you desire to attain your goals and your overall financial health will determine your investment. You can invest in a savings account, money market account, CDs or outside a bank you can look into Mutual Funds and other investments. One important consideration is if your employer offers a 401k program and if they match your contributions, try to maximize on this opportunity. It is pretax dollars and your employer will give additional monies. If this is not available you can look into a regular IRA or Roth IRAs. If you have a small business, there are other options that we can talk about.

Another option to consider is annuities. While all these instruments are important and can be fruitful, they can also be confusing. Do you know where to invest your money? Should you diversify your accounts? What are the tax implications of these investments? These are some of the many questions you may have to think about. As a trained and experienced person this is where we can come in to help you with your decisions. Here at BEW Financial Solutions we are constantly learning as new things and rules change. We also partner with accountants and lawyers to work together to get the best results.

Another step to consider in your financial health is to consider insurance coverage. This is important to protect what you have in place and the plans you are preparing towards.  In the news we are sadly aware of many tragic events that can destroy a family.  An illness, a home fire, or loss of job can radically change our lives. We have all seen the crowdsourcing pages to help those in need.  Do you want to rely on that to protect your family?  A tragedy can cripple dreams, lead to bankruptcy and will always cause worry and concern.

Our goal is to protect you from these occurrences or to lessen the impact.  One of the first things that concern us as a family is how to protect our lifestyles as we plan our futures.  This is where life insurance can come in.  BEW Financial Solutions can work with you to find the best kind of policy, what amount we need for coverage and who needs coverage.  BEW Financial Solutions will always work in your best interest.  While there are products such as whole life policy which will benefit us as agents in higher commission they may not be the best fit for your family.  We will always hold ourselves to the highest standards to protect our clients and do the best for their interest.