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Megan Rightnowar

New Year’s Financial Resolutions: Don’t Forget These Three Things!

As 2020 is coming to an end (thank goodness!), many of us are brainstorming resolutions for the upcoming year. Whether it is focused on budgeting, savings, investments, or insurance, finances often make the list. I fully support reviewing your financial plan to prepare for the year ahead!

Below, I tell you how I personally review my finances each December. I include examples of my personal situation but please apply this to your year, your goals, and your plan because that’s what you’ll ultimately be steering. Happy 2021 planning!

First, let’s review your budget. My husband and fellow financial advisor, Nick, and I review our budget once a year at the end of the calendar year. This month, we’ll have some budget shifting to do because there are numerous factors that both increased and cut costs.

A few months ago, Nick and I started a one car challenge. I am proud to report that it has been an awesome experience and we are going to continue it into the New Year! This challenge eliminated our car payment and lowered our car insurance and gas cost. Other cuts in our budget included my cancelled $125/month membership at a boutique gym and decreased dining out costs. We’ve been focusing the last few months on eating more meals at home. We’re hoping to continue refining our cooking skills into 2021! Cookbooks are welcomed as Christmas gifts. 😊

The next step is to factor in what we have added in the past year. Nick and I doubled our mortgage payment each month. Only five more years until it’s paid off. Woohoo! I also started a weekly membership at Spray Tan Bar in Perrysburg, Ohio. (If you’re local to northwest Ohio, I highly recommend seeing Jordan!)

Now that our expenses are updated, we can move on.

Second, let’s revisit savings and investments. If you read my blog post about savings, you know that Nick and I save $416.67 per month so that our savings increase by $5,000 annually. We decided our bank has reached an amount that we are comfortable with so rather than putting this money into savings, we increased our monthly contributions into our non-retirement investment account. We already max out our Roth IRAs, so we don’t need to adjust anything there. With the increased discretionary income from the one car challenge, we also add money to our non-retirement investment account periodically. Our bank account is linked to our investment account so anytime I want to add more money, I can easily do so!

With those tweaks to savings and investments, we can jump into the final category.

Finally, let’s take a look at insurance. For health insurance, our premium increases each year due to our age, so we will factor the new price into our budget. We will also factor in our existing and new life insurance policies. A few years ago, Nick and I both got LIRPS (life insurance retirement plans), which are permanent policies that build cash. Given our businesses and income have grown each year, we wouldn’t want our lifestyle to change if something happened to either of us, and we’re the healthiest we may ever be, so we decided to get more life insurance. Life insurance pricing is based on health so getting a policy at a young age often leads to the lowest possible price. This additional life insurance means that I’ll need to revisit the first step to finalize our budget and therefore, round out our 2021 financial goals! It also means that Nick better act sad at my funeral.

That’s it! This annual family meeting of ours takes less than an hour and with a solid plan, we are excited to go into the New Year! Tweaking our budget, getting clear on how much we are saving and where we are saving to, and making sure we have the proper amount of insurance in place will set us up for a new year without financial worries. We believe all people can be excited about their financial situation too with proper planning.

At annual review meetings with my clients, we review these same three areas: bank, investments, and insurance. Like my meeting with Nick at our kitchen table, my client meetings last about an hour. If you want to do this family meeting with me so I can provide guidance, I am happy to do so! My contact information is available at my webpage: https://savageandassociates.com/megan-savage-rightnowar.

Cheers to the New Year! May it be filled with many blessings for you and your family!

Savage and Associates
Direct: 419.725.7201 | Office: 419.475.8665
655 Beaver Creek Circle Maumee, OH 43537

Securities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.

Here’s how much to keep in savings

“How much should I/we keep in my/our savings account?”

This is a common question I get when I first sit down with an individual or couple.

You may be familiar with the rule of thumb answer: 3-6 months of living expenses. That makes sense! If you lose your job or your spouse gets transferred to a new state, those funds will serve as a cushion until you find a new position.

Your savings account will allow you to keep all of your subscriptions and avoid ramen noodles every night for dinner.

If you are looking for the short answer, the paragraph above is a great start. However, everyone’s financial situation is different, so if you want to hear what I actually tell my clients, keep reading.

For young people just getting started, I encourage them to save $10,000 in the bank as fast as they can. For some, this will only take a few months and for others, a few years. This amount is attainable when considering what young, single people do with their money.

There shouldn’t be an emergency or fun opportunity such as a friend’s wedding that will deplete the $10,000 in one swoop.

Once achieving $10,000, I recommend clients find their own comfort level. This amount totally depends on the person. For some, they feel confident with $10,000 in their bank.

Other clients prefer $100,000 and can’t sleep at night if that number drops to five digits. Being comfortable and secure in your bank puts you in a better position to optimize other areas of your financial plan. (Personally, I’m a big fan of cash and the flexibility it provides.)

The next question that often follows is about how to allocate the dollars that are above and beyond a comfort level: “Megan, I’ve surpassed $10,000. If I see it in my bank, I’ll spend it. What do we do now?”

If you read my budgeting blog post (click here), you can do what my husband and fellow financial advisor, Nick, does. We put $416.67 a month toward savings. That odd amount adds up to $5,000 a year. Once our savings rose to $25,000, we opened a savings account that earns more than our day-to-day savings.

We called our new bank and they did all of it electronically. We have no cards attached to this account so if we really want the money, we must physically walk into one of their branch locations and make a withdrawal. I don’t even know where their closest branch is to us so you can be assured that this strategy to never touch this account works! I am not worried that I will tap into those savings unless there is truly an emergency. Only then will I look at their website’s branch locator. 😊

The second thing we did once we achieved $25,000 in savings was to increase our monthly contributions to our non-retirement investment account, rather than a savings account. In addition, anytime our bank accounts at our primary bank (our day-to-day bank) get higher than our comfort level, we will do additional deposits into our investment account.

A lot of my clients do this too! They have their bank account linked to their investment account so that anytime they want to make contributions to their investments, they simply give me a call. Conversely, if they need money for something, I can sell the security, and send cash to their bank.

Here’s the last scenario that my clients inquire about: “Megan, I don’t want to leave extra money in my savings account, but I also plan on using that money for something that will take place in the near future. What do I do?”

If you haven’t been able to tell by now, I use myself as an example so my clients know that the advice I give I apply to my own finances!

To answer the question, I put the money I’ll want in the near future in my non-retirement investment account and, specifically, into a fund that would be considered a money market or a money market alternative. I call this my future house money.

For my clients, they may call it future pool, future boujee vacation, future cottage, etc. It’s simply money they don’t need now but will when the opportunity presents itself.

The goal is to not lose money but earn more than a savings account at a bank. If a clients’ goals change and they won’t need the money as soon as they thought, we can turn the dial to make the investments more aggressive. Thankfully, we adapt with clients as their lives change!

If you had any of the questions above, I’m glad you sought out answers to how much you should keep in savings, what to do next and how to optimally plan for future and larger expenses.

Everyone’s comfort level and financial situation is different so I want to leave you with one last piece of advice: never compare your finances to others but rather, find what is right for you.

Want to talk about your specific situation and comfort level? I’m happy to talk! My contact information is available at my webpage: https://savageandassociates.com/megan-savage-rightnowar

Savage and Associates
Direct: 419.725.7201 | Office: 419.475.8665
655 Beaver Creek Circle Maumee, OH 43537

Securities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.

Six benefits to starting your financial planning now

Last month, I posted a picture on Instagram with a cake to celebrate my company’s 5th birthday. I had planned to write a blog post to go along with it but due to the coronavirus, my world has been pretty crazy. Instead of blogging, I’ve been doing a lot of tax loss harvesting and taking on new clients who wanted to take advantage of the downturn in the market.

However, this long holiday weekend (happy belated Fourth of July!) brought some time to reflect on these past five years. While year one looks vastly different than today, one question from clients has remained the same: “Megan, how come they don’t teach this in school?”

What follows that comment is often the client’s regret of wishing they had started their planning earlier in life. While we do our very best to set a client of any age up for retirement success, this is why I love meeting with young individuals/couples. A bonus is that our similarity in age means that we usually become friends and I love new friends. I also have a single younger sister, so I am on the hunt to find her a man … kidding … (maybe)!

Coming from my five years of experience with clients who started their financial planning at an earlier age as well as the alternative, the former has benefits of:

  • seeing their investments grow over a longer period of time with compounding returns,
  • having a higher risk tolerance and therefore, possibly greater returns,
  • potentially getting better life insurance rates before they may face possible medical issues,
  • knowing exactly what to do when their employer offers them a 401(k), Simple IRA, health insurance plans, etc.,
  • feeling confident with their day-to-day budget right out of the gate, knowing that they are setting themselves up for short and long-term success,
  • creating flexibility and control with their future retirement (e.g., a few clients I work with are projected to retire early).

I’m sure I will continue getting the question, “Why don’t they teach this in school?” for the next five years or more. Either way, what matters is that people understand why they should begin financial planning early on. I always joke, “No one has ever said I’m intimidating!” and make it clear that I don’t bill for my time.

If you’d like to not wait a day longer to kick off your financial plan or get a second opinion, don’t hesitate to reach out using the contact information at my page. It’s important that you work with someone who you like and trust. I may not always have birthday cake, but my door is always open!

My clients LOVE this financial tool!

When I sit down with new clients, I love getting to know them and learning what makes them unique. Whether they are a college student or graduated decades ago … single or married with four kids … I typically observe one common denominator: people are overwhelmed by the complexity of financial planning.

Knowing this, the easy response to them would be, “trust me, I’m a financial advisor!” But that is never my approach. I believe that building trust with my clients is something that should not be taken lightly, especially when their financial success depends on it. I do not want people to nod their head to my advice, then walk out the door without really understanding what I said. I want clients leaving curious, excited, and motivated about ways to set themselves up for success. That means they need to be provided the tools to do just that.

In the last year, I made a couple key investments in my practice. My number one favorite investment will be shared in a future post – stay tuned! My second favorite investment has been implementing a wealth management portal for my clients called Right Capital. Right Capital creates an interactive experience for my clients to link their accounts and assets in one place, view their accounts in real time, and see many “what if” scenarios that they may face in their lives — such as how retiring one year later may impact their situation. By helping them see the benefits of making sound decisions today, they are more likely to stay the course in times of uncertainty. Bonus: it’s an app on your smartphone!

Above, you can see a few screenshots of the many tools that Right Capital provides my clients. Whether they are getting started and trying to figure out how to pay off student loans (debt management), or want to know if they are on track to meet their long-term goals (retirement analysis), this platform helps them visualize the importance of proper planning. I want to make sure my clients understand my job doesn’t end at selecting investments, but also educating them in all facets of their financial picture.

My husband and I, as well as other advisors at Savage and Associates, use this tool too. Having found so much value from it, I couldn’t help but to offer it as a complimentary resource for all my clients!

Would you like to see every detail that affects your financial wellness in one spot? Maybe you are more curious about knowing if you are on track to accomplish your retirement goals? Give me a call directly at 419-725-7201 and I’d be happy to find out together.

About Megan:
Megan Rightnowar got into the financial services business almost five years ago to help individuals and families create a plan for financial freedom. She believes that money doesn’t have to control your life and she helps people live that out.  As an extension of her love for educating clients, she enjoys writing blog posts covering a myriad of financial topics. Megan also teaches finance and personal planning for pharmacy students at the University of Toledo.

*Megan Rightnowar was not provided free services or sponsored by Right Capital. All idea expressed above are her own.

Megan Savage Rightnowar
Direct: 419.725.7201
Office: 419.475.8665
655 Beaver Creek Circle Maumee, OH 43537

Securities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.

Is history repeating itself? Market declines continue.

Is history repeating itself? Are we in the midst of another Great Recession?

The last three weeks have been intense in the stock market. On Thursday, March 12 and Monday, March 16, we’ve seen drastic declines. It’s difficult to see the silver lining in the market when the headlines are just as terrifying as the unknown of our investment returns. We haven’t seen the markets act in this manner since 2008-09.

Are we repeating history, and at the start of a recession? The short answer: no. Let’s talk about why …

To begin, I don’t think I could write a comparison better than the one USA TODAY published last week: https://www.usatoday.com/story/money/2020/03/11/recession-heres-how-coronavirus-crises-different-2008/5012228002/

If you read their article and still want my perspective, read on!

As financial advisors, we look to different measurements to gain insight as to what the future of our economy and the market may hold. Without boring you with an economics lesson, I would like to give an overview of just two of them: gross domestic product (GDP) and the consumer price index (CPI).

With respect to our country’s GDP, consumer spending is its key driver. If we look at how the stock market ended in 2018, we were down about 20 percent. Therefore, it must mean a recession followed, right? Fortunately for everyone, that was not the case as we saw tremendous returns in 2019.

So how did the stock market get it wrong? We knew the noise of daily news was causing concerns of trade wars and a government shutdown to investors. In times of uncertainty, volatility increases. Despite the everyday investor seeing significant losses in their investment accounts, Christmas-time consumer spending was up 19 percent from the previous year! This shows us that drastic changes in the market did not translate to drastic changes in consumer behavior. Our country’s current GDP is more than 2 percent. Until we hit GDP of 1 percent, I am confident with our country’s growth.

Another key factor is understanding the CPI. If you look at the chart below from the Bureau of Labor Statistics, you can see that once the CPI reaches 4 percent, a recession is quickly on the horizon. The CPI is currently in the mid to low twos. We haven’t reached the threshold and we shouldn’t assume the coronavirus is a catalyst for a recession.


*Source: Bureau of Labor Statistics

Health care providers, scientists, and the leaders of our communities are working diligently on preventative measures and access to care for the well-being of all. There is not a country more well equipped than America. Hysteria, uncertainty, and volatility will pass. It always does, and once that happens, our country’s strong economic fundamentals will be restored just like they always do.

If you gain one takeaway from this: stay the course. What if in December 2018, you decided to get out of the market for fear of the negative markets to continue? You would have missed out on the positive returns that followed. While this uncertainty is uncomfortable, please stay safe and please choose to be hopeful.

About Megan:
Megan Rightnowar got into the financial services business almost five years ago to help individuals and families create a plan for financial freedom. She believes that money doesn’t have to control your life and she helps people live that out.  As an extension of her love for educating clients, she enjoys writing blog posts covering a myriad of financial topics. Megan also teaches finance and personal planning for pharmacy students at the University of Toledo.

*Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results.

Securities and investment services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.

The coronavirus and its impact on financial markets

Photo of Chinese Man in surgical mask

As a financial advisor, a big part of my role is to educate clients on the stock market. My job doesn’t end at picking investments for my clients but to openly communicate during times of intense media headlines and market volatility. Whether it’s trade wars, a negative fourth quarter in 2018, an election year, or the current coronavirus panic, I like to make sure my clients hear from me not only when we have regularly scheduled review meetings but when their account(s) are being affected.

Yesterday I sent an email to my clients, and I thought it would be valuable to turn that email into a post that others can gain insight. The subject matter: coronavirus. But from the standpoint of its overall impact on the stock market.

As you may be aware, there has been a growing number of cases throughout China, Italy, Iran, Japan and South Korea. Consequently, the global market has experienced increased volatility. It’s no coincidence – the stock market tends to react when a widespread illness breaks out. Two days ago, February 24, 2020, the S&P 500 declined about 3.5 percent, making it the worst day in about two years.

Regardless, if your reaction to the previous paragraph was “YIKES!”, this does not come as a big shock to the financial industry. Business has been slowing overseas with products/services that come out of the affected countries. I am also going to take a wild guess that you haven’t booked your dream trip to Italy in the past few weeks. The global economy is dipping and the market is reflective of that.

We do not know how long the coronavirus will continue to spread and dominate the headlines. Likewise, predicting the end of this current market volatility is equally challenging. As a silver lining though, we can see in the chart created by Dow Jones Market Data (below) that epidemics have historically not impacted the market for a significant length of time. I think you will find relief that only one of the previous 12 epidemics resulted in negative percent changes of the S&P over a six and 12 month period.

In closing, when it comes to the obstacles we are facing in the market, I’m not fretting and it is my hope that you aren’t either. Focusing on long-term objectives when it comes to investment accounts helps provide clarity in times of uncertainty. In the meantime, I’m praying for effective treatment and prevention and I hope you’ll join me.

An advisor’s four-part strategy to saving

Megan Rightnowar

Now that we are more than one month into the new decade, let’s revisit the goals that you made: going vegan, hitting the gym, attending church, sticking to your budget, etc.  As we are “adulting,” one New Year’s resolution question I got bombarded with was, “Megan, where do I put the money I am going to start saving?”

I thought this would be a good time to share the specifics of what my husband and fellow financial advisor Nick and I do for our personal finances.  Let’s dive into our four-part strategy!

Megan working with a customer.Annual Review
We sit down once a year for an annual review of our budget. Yup, that’s it.  That’s how often I recommend that my clients review theirs, too.  Money does not have to control your life, and I believe that revisiting your budget once a year is sufficient if you do it right.

Expenses
We get our pumpkin cream cold brews from Starbucks and pull out our budget sheet (see below).  We use this to outline our recurring expenses, including our mortgage, groceries (aka, takeout … your girl can’t cook!), Pure Barre, our sweetest employee, Kerigan, etc.  We then determine if there are any expenses we can eliminate, such as the gym across the street that I have not gone to once. (WHOOPS!) Next, we estimate expenses that do not occur monthly but know will happen throughout the year like hair appointments.  Lastly, we dedicate 10 percent of our income to our church and other charities – SO many people and organizations doing awesome things in our community!

Savings
Now it’s time to add our savings to the mix.  We set aside $416.67 a month to our savings account so that each year our savings grows by $5,000.  We max out our Roth IRAs and Health Savings Accounts (HSA) with monthly contributions to each.  We then put money toward our non-retirement investment account and our LIRPs (Life Insurance Retirement Plan).  As business owners, we must factor in savings for taxes each month too – shoutout to all the 1099 business owners out there!

(Fun!) Income
At the bottom of the budget sheet, we include our take-home pay and then subtract our expenses and savings.  Drum roll please (with my calculator) … we have our discretionary income, aka our FUN money!  Sometimes we may only have $20 left and other times it may be $2,000.  This is my, “Girl, get that dress!” money.  Some months my closet is growing while other months I ask to borrow a dress from a friend (you know who you are!).  Because we have done the hard part first, we have no regrets, and can truly enjoy the money we have earned.

Now that you know our process, let’s get back to you.  Take a deep breath and start your own budget sheet.  Make a commitment to saving so you can have some FUN!  Need help with the savings piece?  Holla at your girl.

Monthly Budget WorksheetSecurities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.
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