By: Lazetta Rainey Braxton, MBA, CFP®
I'm turning 50 this year. As a financial planner, I rehearse in my mind conversations with my Gen X clients about reaching and surpassing this beautiful milestone in their lives. I recall their bundled emotions — fear and excitement — about decisions made and future opportunities for living their best lives.
One would imagine that I would show the same care to myself as I extend to my clients. I have some work to do, and I hope my confession transforms into wisdom for you and me. Let's explore my realizations as an approaching half-centurion through the lens of the financial planning journey.
Where Are You Financially?
Each year during tax season, my husband and I update our Lifestyle Plan (income and expenses or budget) and our Net Worth Statement (all of our assets and liabilities) as we compile our tax forms and statements for our tax professional.
We reflect on how our decisions during the year show up in our checking, savings, investment balances and property values based on how we spent and saved money. We discuss many competing goals: managing household expenses, paying for our daughter's education, redeploying capital for my growing businesses, covering estimated taxes, saving for retirement and finding funds for college visits and vacations.
It's not clear, however, if our financial habits and one-year reviews afford us the peace that we're on track for a comfortable future. We're fortunate to know the rules of thumb, such as living within our means, paying off credit cards each month, saving with high-yield savings accounts, investing in brokerage accounts, maxing out deposits to our 401(k)s (including catch-up contributions) and Health Savings Accounts (HSA), getting a state tax deduction on contributions to a 529 college-savings plan and securing insurance and estate-planning documents.
Real-life circumstances — job transitions (including my season as a Chief Family Officer, stay-at-home mom or domestic engineer), residing in high-cost-of-living areas and founding businesses — consistently challenge our intent to maintain these financial best practices.