Why You Should Plan Before the Refund Check Comes, Not After
By Matthew Grennell, J.D.February 15, 2019
Why You Should Plan Before the Refund Check Comes, Not After.
Another January is in the books as 2019 is now fully underway. Tax season is quickly approaching and many have already begun to allocate your tax refund-to-be for vacations, home refurbishments, and other non-essential spending. While it may feel like the time to indulge because of your refund, it is important to diligently review your household budget and decide whether or not this money can be put to better use.
This will be the first year in which the changes made by the Tax Cuts and Jobs Act of 2017 will affect your tax return. It is critical that you have the necessary support system in place so that you know how these changes will affect you and ultimately your loved ones. In order to act with prudent fiscal discipline it is vital to have a robust financial plan in place.
A financial plan provides a holistic view of all the moving parts which comprise your financial life––the health of your various accounts, liquidity, cash flow needs, and what buffers you’ve set up for your growth forecasts––as well as what options you have for achieving your long-term goals. Robust financial planning allows you to assess where you are now and how to get where you want to be. The earlier you start the more options you will have within your plan.
Not all financial plans are created equal, setting up a successful plan entails purposeful and intelligent devising. Below are some tips on how to create a valuable financial plan for you, your goals, and the ones you love.
Partner with a financial advisor to create a plan that works for you.
What you want out of your plan will differ depending on your current needs as well as your future financial and life goals.
Collaborating with a financial advisor who can help you organize your priorities and understand the ways your tax refund can fit into your financial plan. For example, let’s say you currently a proud parent of a college student or maybe even multiple students. Your finances are likely proving difficult to manage effectively as you navigate this period of increased financial burden and newfound abundance of personal space and time. Your financial advisor, by collaborating with you in building your financial plan, will help you plan for your needs––in accordance with external factors such as your charitable giving plans or noncore spending desires––so that they’re working for you rather than against you. An experienced advisor can help you understand how your one time increase in cash flow due to a tax refund should be utilized in order to meet your goals.
It’s a matter of working smart so that you build your wealth––both this tax season and long-term––as efficiently as possible.
Ultimately, financial planners help you focus on the next steps and strategies that will guide you to meet your financial goals. This is critical when considering what’s at stake: your future and the future of your loved ones.
Simply put, financial advisors will help keep you from making mistakes when flushing out your financial plan. For example, if you are a small business owner you may think that a 401K is your best savings opportunity year-over-year. This make be true, however, that there are other opportunities out there––from individual simplified employee pension plans (SEPs) to single-payer defined benefits plans––which will allow you to put your qualified money to work in a way that accelerates the impact of your savings. Financial advisors can help you identify and explore these types of opportunities. Advisors who work with clients in similar situations to yours can provide recommendations based on their past experiences.
Work with a financial advisor to determine what exactly you want to save and achieve next year and further down the line.
One key component of designing a financial plan is identifying your savings goals for both the near future and for the long-term. These make up the short term milestones that allow long-term dreams to become a reality.
If you’re planning for a wedding or saving for a house your financial advisor will help you identify how much per month you need to be putting and where to put it. If you hit your savings goals, but the capital is not in the correct account you may incur a penalty to access the money. An experienced advisor can help you understand how forgoing extra expenditures now and allocating your tax refund to save for future goals can alleviate stress and prepare you for unexpected costs. They’ll also be able to ensure you’re saving and investing on an annual basis so as to achieve your 30-to-40-year goals, like retiring comfortably, being able to pay for your child’s college tuition, or gifting a certain amount of money each year to your grandchildren.
As you can see, goals and priorities differ. A financial advisor will help ensure that your financial plan keeps everything straight.
A financial plan is a living document, as your life changes so should your plan.
The flexibility allowed by having a financial plan is another crucial reason why everyone should take the time to create and maintain one. This will help you accommodate for changes to your life and to your ambitions which could otherwise shake your financial equilibrium.
Financial plans are living documents. In working with a financial advisor, you can construct it so that when your life changes, the plan changes to meet new needs. From a new home to job loss, life will throw you curves balls and your financial plan can help navigate these changes. Because having a financial plan helps guarantee you’re saving prudently and in a manner
At Chicago Partners, we build customized financial plans to meet the specific needs of each client. The goal is to ensure that if X happens, you will be prepared. From your long-term goals to more granular details, this kind of flexibility allows you to comfortably account for all kinds of realignment.
The time spent building a financial plan will pay dividends down the road
Although financial planning does demand some commitment on your part––that which isn’t tracked, monitored, or managed doesn’t grow––but getting started much easier than most people think. At Chicago Partners, we empower client to start their financial plan on day one directly through our online wealth management system (“WMS”).
Through WMS we will connect all your accounts so as to assess your ongoing financial progress as it pertains to your goals in real-time. On our end, we’ll gather key information to create a foundational assessment for you that details what state your finances are in right now. We’ll then share recommendations around what we think you should do in the coming year to optimize your wealth.
All of which is to say, as your financial partners, we take care of a lot of the heavy lifting for you.
However you decide to set up your financial plan––and whomever you decide to partner with in the process––it benefits you to start now.
Whether you are starting your career or entering retirement is it never to early or later to start planning. No matter how small or large your goals, working to create a financial plan can help you realize these goals.
The important thing to remember is that establishing a financial plan now amounts to working smart in service of your larger financial goals––approaching your financial security and growth with purpose.
To learn more about creating a financial plan with Chicago Partners, click here.
Matt Grennell, J.D. is a Senior Advisor at Chicago Partners Wealth Advisors. Matt specializes in creating estate plans & cash flow financial plans to help clients make their financial future more secure.
1Zweig, Jason, Value Should Do Better. But When Is Anybody’s Guess, Wall Street Journal, April 27, 2018.
2JPM Guide the Markets, U.S., 2Q 2018, as of March 31, 2018, p 9.
Important Disclosure Information
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CP. Please remember to contact CP, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CP is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the CP’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.
February 15, 2019
Why You Should Plan Before the Refund Check Comes, Not After.
Another January is in the books as 2019 is now fully underway. Tax season is quickly approaching and many have already begun to allocate your tax refund-to-be for vacations, home refurbishments, and other non-essential spending. While it may feel like the time to indulge because of your refund, it is important to diligently review your household budget and decide whether or not this money can be put to better use.
This will be the first year in which the changes made by the Tax Cuts and Jobs Act of 2017 will affect your tax return. It is critical that you have the necessary support system in place so that you know how these changes will affect you and ultimately your loved ones. In order to act with prudent fiscal discipline it is vital to have a robust financial plan in place.
A financial plan provides a holistic view of all the moving parts which comprise your financial life––the health of your various accounts, liquidity, cash flow needs, and what buffers you’ve set up for your growth forecasts––as well as what options you have for achieving your long-term goals. Robust financial planning allows you to assess where you are now and how to get where you want to be. The earlier you start the more options you will have within your plan.
Not all financial plans are created equal, setting up a successful plan entails purposeful and intelligent devising. Below are some tips on how to create a valuable financial plan for you, your goals, and the ones you love.
Partner with a financial advisor to create a plan that works for you.
What you want out of your plan will differ depending on your current needs as well as your future financial and life goals.
Collaborating with a financial advisor who can help you organize your priorities and understand the ways your tax refund can fit into your financial plan. For example, let’s say you currently a proud parent of a college student or maybe even multiple students. Your finances are likely proving difficult to manage effectively as you navigate this period of increased financial burden and newfound abundance of personal space and time. Your financial advisor, by collaborating with you in building your financial plan, will help you plan for your needs––in accordance with external factors such as your charitable giving plans or noncore spending desires––so that they’re working for you rather than against you. An experienced advisor can help you understand how your one time increase in cash flow due to a tax refund should be utilized in order to meet your goals.
It’s a matter of working smart so that you build your wealth––both this tax season and long-term––as efficiently as possible.
Ultimately, financial planners help you focus on the next steps and strategies that will guide you to meet your financial goals. This is critical when considering what’s at stake: your future and the future of your loved ones.
Simply put, financial advisors will help keep you from making mistakes when flushing out your financial plan. For example, if you are a small business owner you may think that a 401K is your best savings opportunity year-over-year. This make be true, however, that there are other opportunities out there––from individual simplified employee pension plans (SEPs) to single-payer defined benefits plans––which will allow you to put your qualified money to work in a way that accelerates the impact of your savings. Financial advisors can help you identify and explore these types of opportunities. Advisors who work with clients in similar situations to yours can provide recommendations based on their past experiences.
Work with a financial advisor to determine what exactly you want to save and achieve next year and further down the line.
One key component of designing a financial plan is identifying your savings goals for both the near future and for the long-term. These make up the short term milestones that allow long-term dreams to become a reality.
If you’re planning for a wedding or saving for a house your financial advisor will help you identify how much per month you need to be putting and where to put it. If you hit your savings goals, but the capital is not in the correct account you may incur a penalty to access the money. An experienced advisor can help you understand how forgoing extra expenditures now and allocating your tax refund to save for future goals can alleviate stress and prepare you for unexpected costs. They’ll also be able to ensure you’re saving and investing on an annual basis so as to achieve your 30-to-40-year goals, like retiring comfortably, being able to pay for your child’s college tuition, or gifting a certain amount of money each year to your grandchildren.
As you can see, goals and priorities differ. A financial advisor will help ensure that your financial plan keeps everything straight.
A financial plan is a living document, as your life changes so should your plan.
The flexibility allowed by having a financial plan is another crucial reason why everyone should take the time to create and maintain one. This will help you accommodate for changes to your life and to your ambitions which could otherwise shake your financial equilibrium.
Financial plans are living documents. In working with a financial advisor, you can construct it so that when your life changes, the plan changes to meet new needs. From a new home to job loss, life will throw you curves balls and your financial plan can help navigate these changes. Because having a financial plan helps guarantee you’re saving prudently and in a manner
At Chicago Partners, we build customized financial plans to meet the specific needs of each client. The goal is to ensure that if X happens, you will be prepared. From your long-term goals to more granular details, this kind of flexibility allows you to comfortably account for all kinds of realignment.
The time spent building a financial plan will pay dividends down the road
Although financial planning does demand some commitment on your part––that which isn’t tracked, monitored, or managed doesn’t grow––but getting started much easier than most people think. At Chicago Partners, we empower client to start their financial plan on day one directly through our online wealth management system (“WMS”).
Through WMS we will connect all your accounts so as to assess your ongoing financial progress as it pertains to your goals in real-time. On our end, we’ll gather key information to create a foundational assessment for you that details what state your finances are in right now. We’ll then share recommendations around what we think you should do in the coming year to optimize your wealth.
All of which is to say, as your financial partners, we take care of a lot of the heavy lifting for you.
However you decide to set up your financial plan––and whomever you decide to partner with in the process––it benefits you to start now.
Whether you are starting your career or entering retirement is it never to early or later to start planning. No matter how small or large your goals, working to create a financial plan can help you realize these goals.
The important thing to remember is that establishing a financial plan now amounts to working smart in service of your larger financial goals––approaching your financial security and growth with purpose.
To learn more about creating a financial plan with Chicago Partners, click here.
Matt Grennell, J.D. is a Senior Advisor at Chicago Partners Wealth Advisors. Matt specializes in creating estate plans & cash flow financial plans to help clients make their financial future more secure.
Important Disclosure Information
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CP. Please remember to contact CP, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CP is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the CP’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.