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Financial Planning Month

About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C., area who works with clients virtually across the country. Dream Financial Planning is a Fiduciary Financial Planning firm specifically designed to help individuals in their 30s and 40s take control of their finances and fulfill their dreams. Feel free to schedule a Free Consultation to learn how we use the DREAM Financial Planning Process ™ to help our clients achieve their goals. 

Free Estate Planning Documents

For the month of October, I'm offering a free Will or Trust-Based Estate Planning package if you sign on by the end of October 2023 and purchase a one-time financial plan. The cost of a Comprehensive Financial Plan for an individual is $4,200, and the cost for a couple is $5,400. With unlimited support for one year from the date you sign the contract.

What's In Your Estate Plan?

We have partnered with a leading Estate Planning platform to deliver high-quality Estate Planning documents for a fraction of the cost of working with an attorney. In conjunction with our partner, we'll provide a complete estate planning experience in a collaborative fashion. We'll be able to facilitate, create, visualize, maintain, and ultimately administer your Estate Plan.

Revocable Living Trust-Based Estate Plan

  • Individual - $1,600
  • Couple - $2,100

Will-Based Estate Plan

  • Individual - $900
  • Couple - $1,400

As the holiday season draws near, most people are thinking about their finances over the next few months and budgeting for how they can celebrate the most wonderful time of the year. Which is perfect timing because October is National Financial Planning Month!

Let’s use this month to celebrate the importance of proper financial planning and share some tips and tricks on how to get your financial planning in order.

Create a Budget

The first step in understanding and taking control of your finances is creating a budget and sticking to it. Everyone’s budget will look a little bit different, but the 50/30/20 rule is a good place to start.1

The 50/30/20 rule states that 50% of your budget should go to essentials, such as rent, food, and utilities; 30% should go to wants, such as entertainment or travel; and 20% should go to savings and paying off debt.

There are also a lot of helpful apps to help you stick to your budget, such as Mint, You Need a Budget (YNAB), and Honeydue for budgeting with a partner.

5 savings mistakes people make when building their financial life - CNN

Be Smart With Your Debt

Not all debt is created equal, meaning debt isn’t always a “bad” thing if you are smart with it. For example, taking on a car loan and making all the payments on time can help you afford a car if you don’t have enough money to pay cash and can help you build up your credit score. But be wary of high-interest debt because that can get you into problems quickly.

Understand Interest Rates

Speaking of interest rates, it’s important to understand how they impact your finances and debt. Depending on the current market and your credit score, mortgage rates generally hover between 3% and 6%. In contrast, the average credit card interest rate as of March 2022 was nearly 20%. With that high of a rate, you can see how getting into credit card debt can quickly pile up and make it hard to take control of your finances.2,3

In addition, understanding interest rates can help you make strategic financial planning decisions. Rather than paying all cash for an asset (e.g., a car or a house), if you can get a low-interest loan, you can consider investing the cash you would have spent on an investment vehicle that could generate a higher return than you are paying in interest.

For example, if you have $10,000, you might consider putting $2,000 toward a car and financing the rest at a 2% interest rate while investing the other $8,000 in the S&P 500, which has delivered a compound average annual growth rate of 10.7% per year over the past 30 years.4

Get Covered by Insurance

Lastly, another thing you can do to celebrate Financial Planning Month is to ensure that you are properly covered with the right insurance. If you have dependents or people relying on your income, life insurance is a must-have. Life insurance can ensure that the people you love will be taken care of if something were to happen to you. In addition, you should definitely consider renters or homeowners insurance, car insurance, disability insurance, and health insurance.

Life Insurance Awareness Month

There are lots of things you can do to take control of your finances for National Financial Planning Month, and these are just a few. Kick off the holiday season by strengthening your financial fitness.

Insurance is one of those things most people don't like to spend money on. However, when disaster strikes and you don't already have coverage the results could be catastrophic. I see this often with my clients in their 20s and early 30. Whether it's a lack of renters insurancelife insurance, disability insurance, or umbrella insurance. If you're in your 40s or 50s it might be time to start shopping for Long-Term Care Insurance. As a Fee-Only firm I don't sell any type of insurance. However, I do understand the importance of helping  my clients maintain proper insurance coverage as part of a well crafted Financial Plan. If you have any questions about your insurance coverage feel free to contact me to schedule an insurance review

Short-term and Long-term disability insurance

One of the major pieces of insurance I see clients overlook is short-term and long-term disability insurance. This insurance will replace a portion of salary, typically 60% if you become disabled.

Umbrella Insurance Coverage

If you're net-worth exceeds the liability limits of any auto or home owners insurance you have you should strongly consider an umbrella insurance policy that will provide additional coverage. This coverage is offered by virtually every insurance carrier and is usually very cost effective. Check with your current insurance advisor to see if it makes sense for you. 

I've included 2 PDFs below that can help you evaluate your insurance needs.

What Issues Should I Consider When Reviewing My Health And Life Insurance Policies

What Issues Should I Consider When Reviewing My Property And Casualty Insurance Policies

Having at least a basic insurance plan is essential for anyone. While many jobs cover your insurance needs, not all of them do. It's important to figure out what insurance plans you need and what works best for you and your family. Choosing an insurance plan can be complicated, so when doing so, try to avoid these mistakes. 

Work With Us

Wealth Management - Combines ongoing financial planning and investment management. The financial planning fee is waived if we manage at least $500,000 in investments for you. Tax Preparation will be included.

Ongoing Financial Planning - Our most popular program now includes tax prep. This is a good fit if you have several goals and want the option to manage your investments. We'll cover everything from spending, insurance, taxes, investments, retirement planning, and estate planning, just to name a few. Our goal is to give you and your family an easy-to-understand comprehensive plan to provide you with confidence you're making the right financial decisions.

One-Time Financial Plan With Ongoing Support - An accelerated version of the service above with additional support for one year after your start date. This service requires prepayment for the year and is offered at a significant discount from the annual pricing for ongoing planning.

Estate Planning - If you're looking for a cost-effective solution to get your estate planning documents in place, we can help. We have partnered with a leading Estate Planning platform to deliver high-quality Estate Planning documents for a fraction of the cost of working with an attorney.

Revocable Living Trust-Based Estate Plan

  • Individual - $1,600
  • Couple - $2,100

Will-Based Estate Plan

  • Individual - $900
  • Couple - $1,400

Tax preparation is now part of the ongoing financial planning program. This will be in addition to the Tax Report we already generate for clients and our work with the IRS Withholding Calculator to help prevent our clients from getting a surprise tax bill.

Three-Hour Ask Me Anything - This is a good fit if you have 2-3 goals you want help with. These three one-hour meetings need to be completed within three months. The fee for this service is $2,000.    

Financial Coaching - Our financial coaching program starts at $99/month. This is ideal for someone who is looking to simplify and automate their finances. We'll also serve as an accountability partner and help you overcome obstacles that may be stopping you from accomplishing your goals. You can learn more about our coaching program here. If you think this program might be a good fit for you, schedule a 15-Minute Demo.

Paying for College

This service is an ideal fit for parents of high school juniors and seniors with a standardized test score (ACT/SAT) and a list of colleges they're considering. This is included as part of ongoing financial planning or as a stand-alone package. This service includes:

  • A college affordability assessment
  • How Much Colleges Think You Can Afford (EFC) 
  • If You Qualify for Need-based Grants
  • If You Qualify for Merit-based Scholarships
  • Help you search for scholarships
  • 1 Year Out of Pocket Cost (For Each College)
  • 4 Year Out of Pocket Cost (For Each College)    

I hope we get the opportunity to work together. If you'd like to see if any of these services are a good fit for you, feel free to schedule a free consultation or send me an e-mail.

Get More Personal Finance Tips

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  1. https://www.investopedia.com/ask/answers/022916/what-502030-budget-rule.asp
  2. https://www.bankrate.com/mortgages/historical-mortgage-rates/#tens
  3. https://www.forbes.com/advisor/credit-cards/average-credit-card-interest-rate/
  4. https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp

Disclaimer: Dream Financial Planning, LLC does not warrant that this information will be free from error. None of the information provided on this website is intended as investment, tax, accounting, or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. Under no circumstances shall Dream Financial Planning, LLC be liable for any direct, indirect, special, or consequential damages that result from the use of, or the inability to use, the materials in this site, even if Dream Financial Planning, LLC or a Dream Financial Planning, LLC authorized representative has been advised of the possibility of such damages. Please consult with your own advisor before making any changes to your Financial Plan, Investments, or Insurance coverage.