Prices are rising for everyday items, from groceries to Starbucks coffee (especially if you’re a Pumpkin Spice Latte fan), as inflation remains at a 40-year high. If you have a budget prepared, it may be time to make some adjustments.
“The big sources of inflation included food, shelter, transportation services and medical care services. The owners’ equivalent rent index increased 0.8% over the month, the largest monthly increase in that index since June 1990,” Wall Street analyst Adam Crisafulli of Vital Knowledge said in September.
As costs continue to climb, you may be searching for ways to save. Fortunately, you don’t have to do it alone. A financial adviser can review your finances and provide guidance on your spending, investments and more. Get started now.
How can a financial advisor help me fight inflation?
Sky-high inflation is driving more Americans to consider taking on a second job or side hustle to supplement their incomes. However, not everybody has the flexibility or time to dedicate to another gig outside of their current positions.
No matter where you’re at in your personal finance journey, a financial adviser can help. Here are a few examples:
Goal setting
Before you make any money moves, you should have a clear picture of your goals. Are you saving up for a new house? Are you preparing to send your kids to college? Are you getting ready to retire?
These are some of the questions you’ll need to ask yourself. They’re also important questions your financial adviser would want to know in order to successfully help you.
“When convenience and liquidity are important, an advisor can help you find the most appropriate investment products and the right asset mix for your savings. They’ll work with you to set a strategy for contributions, then help you tune out the noise and focus on the things you can control, like keeping costs low and maintaining a disciplined approach,” investment management company Vanguard notes on its website.
In the U.S., just 33% of American adults said they’ve written a financial plan, according to Charle Schwab’s 2021 Modern Wealth Survey. Most adults blamed time and money as the top reasons for not creating a solid financial plan. No matter your financial situation, it’s never a bad idea to set goals and a budget. The earlier you start, the better. Get started now.
Investing
Investing isn’t easy. You have to know what to buy and when. Plus, you have the added pressure of navigating an unpredictable economy. The Federal Reserve has raised its benchmark interest rate at least five times this year as it tries to curb inflation. And economic experts are being asked about the likelihood we’re heading into a recession.
During a time of uncertainty, a diversified portfolio is key. So, be sure to evaluate your investments.
“In this inflationary environment, as with any period of high uncertainty, investors should reflect on their goals, time horizon, and tolerance for risk. If you determine that you need to make a change after that analysis, you should consider it carefully before making any sweeping changes (such as switching all your investments to cash). …Oftentimes, a moderate adjustment will suffice,” says Jim Dunn, a certified financial adviser.
Should you buy a variety of stocks during a recession? How about buying gold? Don’t worry about making these types of financial decisions on your own. Lean on an expert for guidance.
“If markets go down, avoid the trap of feeling like you have to do something. Stay focused on your goals and enjoy the long-term benefits of a diversified portfolio,” Vanguard advises.
Retirement planning
Whether you have a 401(k), Roth IRA or another type of plan, there are several ways to boost your savings to ensure a smooth retirement. It’s critical to understand how your plan works and the other options available to you. A financial adviser can review your accounts and create a unique plan based on your age range, current savings and goals.
“Financial security in retirement doesn’t just happen. It takes planning and commitment and money,” the U.S. Department of Labor stresses on its website, urging adults to review their retirement savings plans, including benefits offered by employers.
“It is important to understand how your plan works and what benefits you will receive,” the department added.
Vanguard notes that Social Security will also play a big role in your retirement, so you should maximize your benefits. These benefits represent about 30% of elderly Americans’ income, according to the Social Security Administration. The administration recently announced that its 2023 cost-of-living adjustment (COLA) will jump to 8.7% – the highest in over four decades. That impacts the roughly 66 million Americans who receive monthly benefit checks.
An investment management company like Vanguard can make sure your retirement plan is comprehensive and give you advice on all sources of income, from a 401(k) to Social Security benefits and beyond. Reach out for help today.
