Financial Planning: Know Your Numbers header image

Financial Planning: Know Your Numbers

For basketball fans, it’s the best time of the year – the time when you fill out a bracket (or two or three) and watch your favorite teams “duke” it out on the hardwood. Every team brings a unique mix of size and speed, doing their best to maximize their performance using strategies designed specifically to fit their needs.

Planning for your personal financial future isn’t all that different from planning to reach the Final Four. You need a strategy that fits your style of play and you need to be able to make adjustments along the way. So where do you fall on the 2019 bracket? Read on for our game-winning strategies.

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Rookies (Young Adults)

Characteristics – You’re just starting out, likely in your 20’s. You’re a recent grad (high school and/or college) and are thinking about insurance and financial planning options for the first time. You may have debt to pay down and you’re focused on building for the future.

Keys to your game:

  • Build a Budget – When you are starting out, take time to put together a budget that that includes money for all essentials (like housing, food, car payments). Make room in your budget for things like insurance. Make a point to set aside money from each paycheck in a savings account. Need help drafting a personal budget? We share some essential tips here.
  • Begin a Long-Term Savings Plan – You have a chance to begin investing, either through an employer-sponsored plan or on your own. If your employer offers one, it’s wise to take advantage of 401(k) plans – be sure to contribute enough to get an employer match to your funds. Need help choosing your allocations? Contact a Farm Bureau advisor for guidance and quick tips.

Stats to Know:

  • Compounding Interest – This is like putting time back on the clock. When you start saving at a young age, you earn interest on that money. Over time, the interest you’ve accumulated earns more interested, compounding the earnings on your investment. Using this strategy can make your investments work harder for you, even if you put away less money than your more experienced counterparts.

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Starters (Young Families and Professionals)

Characteristics – You may be newly married, making strides in your career or starting a family. If you played ball as a Rookie, you may have a game plan in place, but it’s probably time to make some adjustments.

Keys to your game:

  • College or Retirement Savings – If you’ve started a family, you may be wondering if you should prioritize college or retirement savings. With the right game plan, you can save for both – and you should! Talk to your Farm Bureau advisor for tips on the right strategies for your family.
  • Life Insurance – Now that you have laid a solid financial foundation, it may be time to consider adding life insurance. Between term and whole life insurance, you have options. Your Farm Bureau agent can help you choose the right plan for you and your “team” (your family).

Stats to Know:

  • Risk Tolerance – When you work with a Farm Bureau agent or advisor, they’ll ask a series of questions to help determine how comfortable you are taking risks with your money. Conservative investors prefer less risk of losing money than their more aggressive counterparts.In your 20’s, you may be able to take advantage of less conservative options. Your Farm Bureau advisor can help you develop a solid game plan.

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Varsity (In Your Prime)

Characteristics – At this point, you’re a seasoned player. You are in the prime of your life and your career. Take advantage of this time by working your investment game plan.

Keys to Your Game:

  • Investment Strategies – If you have been contributing to your retirement plans for a few years now, it may be time to implement some goal-based investing. This could be a great time to direct your investment strategy toward a second home, a bucket-list vacation, or another dream expense.
  • Retirement Planning – Whether you’ve been tucking away money for years or are just beginning to turn your attention toward retirement, consider adding an IRA or a Roth IRA, or investments to the mix.

Stats to Know:

  • Diversification – You’ve heard the phrase “don’t put all of your eggs in one basket.” Diversification works the same way – it’s a way of spreading your investment risk into several different types of investment options so that you can protect yourself from market swings.

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Ready to Coach (Retirement)

Characteristics – At this point, you have been playing the game for a while and are ready to retire. The plans that you have put in place can pay off big time on your final score.

Keys to Your Game:

  • Plan Your Legacy – When you are looking at the next steps for your business or farm or ranch, you want to ensure that you protect everything you have worked for. Retirement may be a few years away, but it’s a great opportunity to look at farm succession planning or business succession planning. Understand retirement distributions and plan a budget that will work for you in this stage.
  • Plan Your Estate – In addition to succession strategies, you can plan your estate (including writing a Will). Consider what you will be gifting to your family, to charities, or other local organizations. Your estate should reflect your values and is a product of everything you have worked hard for. Your Farm Bureau Advisor can connect you with the right resources and play an important part of your estate planning team.

Game-winning Stats:

  • Stability – Even in retirement, insurance can play an important part of your financial plan. You protect everything you have worked for when you insure your home, auto and life. Talk to your Farm Bureau agent about right-sizing your coverage for your changing needs.

 

No matter where you fall on the college basketball bracket of life, your Farm Bureau agent or advisor can help you develop a winning strategy for your financial future.

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