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Dec 9, 2021

We all have some sort of understanding when it comes to personal finance. If you’re reading this or listening to the podcast, you’re probably above average when it comes to taking care of your money.

But there’s more to it than most people assume. Personal finance refers to how you manage your money and how you plan for the future. It’s not just the budgeting side of things. And when you take care of your personal finances, you’re setting yourself up for retirement success.

We’ve had a number of clients come in recently and tell us they want to retire early. Things have been going better than anticipated and they wanted to find out if that early retirement would actually be within reach. As we go through someone’s personal finance, we can see how much they’re spending and whether any adjustments need to be made in retirement.

That’s one of the reasons we wanted to talk about it on the podcast. This show will discuss what personal finance means to the planning process with our clients and how we help them get things in order.

So where do you start? The first thing that’s important to do is to determine your net worth. You do that by subtracting everything you owe from everything you own. Whatever is left over will drive your net worth figure. Now, we wouldn’t include the home in the net worth value and put that towards retirement because you always need a place to live. You might, however, be able to apply value to your net worth if you’re thinking about downsizing.

From there we enjoy helping clients put together a spending plan (or budget). This will help you determine where your money is going because you can check for leaks as well as plan for big-spending items.

The next thing we want to discuss is recognizing and managing your lifestyle inflation. This is a phenomenon where we see most people spend more as they move up in their careers and earn more. They are almost correlated because we spend what we have, right? 

When you do each of these things, you’re able to really get a firm hold on your personal finances. We go into more detail on the show so have a listen when you get a chance. If you have any additional questions about what we discussed, please contact us.


What we discuss in this episode: 

0:27 – Why this topic today?

3:05 – Crunching the numbers

4:42 – Starting point

7:32 – Developing a budget9

9:02 – Recognizing lifestyle inflation

11:30 – Clients wanting to retire early


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