How to Feel About Consumer Feelings
The Consumer Sentiment Index is sometimes viewed as a beacon of how investors feel about the direction of the economy.
The health of every financial plan depends heavily on sound cash flow planning. While most people know what they should be doing, they still often fall short of taking even the most basic steps toward tracking and managing cash flow. You can have a dramatic long-term impact on your financial well-being by simply increasing the awareness of your spending while promoting discipline and accountability.
To help you establish and maintain a cash flow plan that supports your lifestyle and goals, we created the following checklist.
Some of the topics we will cover include:
Do you need to quantify your regular earned income?
If so, consider the following:
Do you receive variable or irregular income (owner distributions/draws, commissions, a bonus, etc.)?
Do you, or will you, receive unemployment income?
Can you reliably expect to receive regular gifts or other windfalls?
If so, consider what amounts, if any, would be prudent to include in your cash flow plan.
Do you receive rent, royalty, alimony, and/or child support payments?
Do you have income-producing investments?
Are you taking distributions from your portfolio (e.g., regular withdrawals, RMDs, etc.)?
Do you have pension and/or annuity income?
Are you eligible for, or already receiving, Social Security benefits?
Do you need to quantify your fixed expenses?
If so, consider the following:
Do you need to quantify your variable expenses?
If so, consider the following:
Do you have other infrequent, but expected, expenses?
If so, consider adding a “miscellaneous” category to account for these costs, establishing specific savings goals, and/or adding a buffer to your emergency fund in order to comfortably cover these expenses as they may arise.
If you own a rental property, do you need to consider expenses related to owning or maintaining it?
Do you need to distinguish between essential and discretionary expenses?
If so, consider each expense in your spending plan and determine whether it qualifies as a need (mandatory/unavoidable) or a want (subject to choice/preference). This distinction may be subjective and change over time.
Do you fund untracked expenses with cash?
If so, consider monitoring your uses of cash to avoid leakage.
Can you change the frequency of any recurring payments to reduce the total annual expense (paying certain bills annually instead of monthly)?
Do you need to assess your spending patterns and modify your spending habits?
If so, consider what lifestyle changes could adjust your essential and discretionary spending.
Do you have debts that you are currently repaying?
If so, consider the following:
Do you need to quantify your tax obligations and review your plan to remit payments?
If so, consider the following:
Do you need to review your financial goals?
Do you need to prioritize your financial goals?
If so, consider the following:
Do you need to increase the size of your emergency fund?
Do you have the flexibility to front-load your annual savings early in the year?
Do you need to save for expected large outlays (e.g., new car, new roof, technology updates, options exercise/tax, etc.)?
Do you need to earn additional income?
Do you need to adjust your balance of saving vs. spending?
If so, consider whether forced-savings strategies would help you reach your goals.
Do you need to track automatic payments/savings, and/or set up automatic payments/savings?
If so, consider the following:
Do you need to establish a method of regularly monitoring your cash flow?
If so, consider the following:
Would a broader duration (e.g., 12 months) review of your cash flow help to smooth out sporadic income and expenses?
If so, use annual statements (including any year-in-review spending analysis/categorization offered by your banks or lenders) to track total spending and income.
If you monitor and track your own cash flow, does your calculation of outflows fail to equal your actual inflows?
If so, consider reassessing your estimates in order to more accurately track your cash flow.
Do you need to project future cash flow?
If so, consider what assumptions (e.g., inflation and other applicable rates) and adjustments will create accurate models.
If you have any questions after reviewing this checklist, please reach out to our professional team anytime at info@shorepointadvisors.com or (732) 876-3777.
This checklist was prepared and first distributed by fp PATHFINDER.
DISCLAIMERS
This material is intended for general public use. By providing this material, we are not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. This is not an offer to buy or sell a security.
Shore Point Advisors is an investment adviser located in Brielle, New Jersey. Shore Point Advisors is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Shore Point Advisors only transacts business in states in which it is properly registered or is excluded or exempted from registration. Insurance products and services are offered through JCL Financial, LLC (“JCL”). Shore Point Advisors and JCL are affiliated entities.
The Consumer Sentiment Index is sometimes viewed as a beacon of how investors feel about the direction of the economy.
What happens when a mutual fund or ETF becomes obsolete? The most common and straightforward outcome is a liquidation.
Another election day has passed. It is hard to know what will happen between now and the inauguration, let alone what awaits us beyond.
Let’s contemplate some of the tried-and-true steps to help better prepare your financial affairs for when disaster strikes.