Caught in the Middle

A growing number of individuals and couples are entering the ranks of the Sandwich Generation.  What they have in common is that they are “caught in the middle” between the competing needs and wants of their dependent children and aging parents.  In addition, they also need to consider and prepare for their own retirement years and potential long-term care needs.

For example, most members of the Sandwich Generation value higher education and feel compelled to provide that opportunity for their children.  Other “sandwichers” are pressed into service by providing financial resources to a divorcing adult child or helping raise a grandchild.  In addition, as life expectancy increases, their aging parents are likely to survive well into their 90’s and require monetary and caregiving assistance. (more…)

Extra Years – Managing Our Windfall

Since the turn of the last century, improved nutrition and advances in medicine and healthcare have added 30 years to our average life expectancy.  Without question, this is a remarkable achievement, but one that also requires each of us to think differently about “old age” and how we choose to live our lives.

For example, in Working Through Demographic Change, authors Elliott Jaques and William Zinke wrote, “People are living longer and in better health, and the meaning of adult life itself has changed: a whole new stage of mature adulthood has come onto the scene, and old age has been pushed back by many years.” (more…)

Mastering Cash Flow: Your Key to Financial Success

Budgeting. Just the thought of that word can elicit groans and shudders. Yes, there are those out there who love typing every expenditure into their spreadsheets or personal finance software programs, who gleefully save every receipt from every purchase, and who enjoy doing this every day. But for some, the idea of taking the time to create and maintain a full-blown budget can be intimidating. ~ Anna Prior, Wall Street Journal

The key to financial success is adopting a cash flow plan that will guide your financial decisions on a day to day basis. In addition, understanding and controlling how money flows in and out of your life will free you from financial stress and empower you to achieve your most important life goals. (more…)

Goals are Key to Designing Your Rich Life

Financial Life Planning is a holistic process that will help you to clarify your values and guide you in defining and designing your unique version of the “rich life.”

Goal setting is an essential component of this process, and a powerful tool for experiencing what is most important to you.  When you imagine what you want your life to be like and what you want to achieve, these images will become the basis of your life and financial goals. (more…)

Holistic Planning for Later In Life

We often equate preparing for old age with achieving the financial security needed to sustain us throughout life. However, a truly successful and fulfilling aging experience requires planning and preparation in all areas of life.

Financial planning is indeed important, but money alone cannot “buy” happiness, good health, meaningful relationships, and purposeful activities. In The Late-Start Investor, John Wasik wrote:

“Instead of absorbing an obsolete view of retirement, you should consider what I call your New Prosperity. This includes a flexible life plan that provides for your financial, vocational, physical, emotional, and spiritual needs. Unless you look at your future holistically, merely saving up a pile of money will be a meaningless act.” (more…)

Nurturing Financial Capability

Financial capability is defined as the capacity—based on knowledge, skills, and access—to manage financial resources effectively.

All parents, of course, hope their children will grow up to be financially responsible, savvy, and confident adults. However, because financial education has rarely been taught at home or in schools, most parents themselves feel ill-equipped to train and guide their children in matters of money. (more…)

Defining the Why of Your Goals

Failing to reach our personal and financial goals can be both frustrating and disheartening. And, to make matters worse, we often realize that we are our own worst enemies when it comes to sabotaging our dreams.

However, research has shown that we can dramatically increase our rate of success by first determining a meaningful and internally motivated “why” for each of our goal pursuits.

Self-Determination Theory (SDT) is a model of human motivation that is concerned with supporting our natural or intrinsic tendencies to behave in effective and healthy ways. This widely accepted model was initially developed by Edward L. Deci and Richard M. Ryan, psychology professors at the University of Rochester, and is now researched and practiced around the world. (more…)

Albert Bandura & Self-Efficacy

Albert Bandura, Ph.D. is regarded as one of the most eminent psychologists of our time.  Bandura started his career in 1953 and still maintains an active schedule of teaching and research at Stanford University.  On the occasion of his 80th birthday, he wrote:

“As I reflect on my journey to this octogenarian milepost, I am reminded of the saying that it is not the miles traveled but the amount of tread remaining that is important.  When I last checked, I still have too much tread left to gear down or to conclude this engaging Odyssey.” (more…)

Financial Confidence

Self-confidence is your own evaluation of your abilities to accomplish a given task. “Stepping outside of my comfort zone” is a phrase many of us use to describe how we feel in situations where we don’t know how well we will perform or how others will respond to us.

It is the level of your self-confidence that is likely to determine what goals you will set and what actions you will take.  Many individuals can be self-assured in other areas of their lives, but not feel confident when it comes to matters of money management and financial planning. (more…)

A New Perspective on Risk Tolerance

When you are making an investment decision, do you intentionally weigh the potential risks and rewards?  Is weighing that balance more of a rational or emotional process for you?  In other words, do you tend to rely more on facts or on feelings?

For investors, “risk” is defined as the chance to experience loss versus the chance to experience a gain.  At one end of the risk tolerance continuum are those individuals who are averse to risk.  They focus their thinking on the “loss” part of the equation.  For them, risk is anxiety producing and a factor to be avoided.  They want to stick with the known and predictable.  In addition, those who are risk averse value financial stability above all else.  Therefore, they are willing to sacrifice higher returns to achieve that sense of guarantee. (more…)