Honey Badger Just Dont Care

Look out Bees and Cobras

Honey Badger offers Financial Planning Advice

I really need to get this off my chest and I don’t want to post it to Facebook as it will cause additional “issues” with me discussing “in public”, but I REALLY feel it is my duty to put this out there so what is happening to us does not happen to your children. I am not promoting this post either, so if you stumbled on this, I hope it helps you.

RETIREMENT

If you are just entering the work force, and have yourself your first real job, and your job offers a 401K retirement plan, BEGIN CONTRIBUTING TO IT IMMEDIATELY! I don’t care if you are an 18 year old mail person at a big corporation, or a secretary at a small company, or a newly hired specialist with a starting salary of 6 figures. BEGIN CONTRIBUTING TO IT NOW! If you say you cannot afford to do it, speak to your HR people, or payroll people and have them figure out how much money you can contribute PRE TAX that would allow you to keep YOUR SAME SALARY! 401K contributions are PRE-TAX, so in layman’s terms, or a layman’s explanation, you may be able to put 50 bucks into your 401K PRE-TAX and because the money is PRE-TAX, you will probably have the same take home. Even if it is only 10 bucks, DO IT.

Teachers, cops, any other public employee with pension systems: Your pensions are no longer a given. One word: Wisconsin. In New York State, we have a 403B program that is basically a public version of a private 401K. Look into it for you state and DO IT.

Waiting a year or two when you are right out of school, I will say that is ok, but IF YOU HAVE CHILDREN, DO IT IMMEDIATELY!

COLLEGE SAVINGS vs. RETIREMENT

If you have children, and are unable to focus on both retirement and college savings, CHOOSE RETIREMENT. Saddling your kids with student loans is much less detrimental on your kid’s future than saddling them with supporting you, especially when they have small children that will eventually need to go to college and you don’t want to burden them with your issues.

LIFE INSURANCE

If you have anyone who depends on you, you owe it to them to protect them should something happen to you. If your employer offers one, DO IT, it will be cheaper than on your own. If you do not have access to it, get the CHEAPEST THING that would at least cover your burial expenses. Making your children have to take out a loan to cover your final expenses is ridiculous. IF YOU HAVE NO HEALTH INSURANCE, AND CANNOT AFFORD IT – pay the 20 bucks a month for a small policy. Of course I am not equating having no health insurance with, you know, dying anytime soon, but speak to a financial expert to ensure that if something should happen to you, the $$ from the policy go specifically to whoever will be in charge of your final expenses.

SELF EMPLOYMENT

Ok, if you are self-employed and work for yourself (if you own your own company and people work for you, of course as part of your business plan you will be responsible for your own payroll, insurance and offerings) – SPEAK TO A FINANCIAL ADVISER and make sure he/she points you in the right direction. A GOOD FINANCIAL ADVISER will not charge you to meet with you. They make their money on the back end of things (life insurance, mutual funds, etc). Since you are self-employed, you will need to do/provide everything yourself.

Make sure you use an ACCOUNTANT as well to do your books and knows tax codes. You need someone who will be able to analyze things without emotion or connection. You need someone who sees your business as facts and figures. You need someone to tell you “This isn’t working”.

If an account tells you “this isn’t working”, set a deadline to turn things around. It can be a month, 6 months, a year, or even a time frame an accountant would be able to pinpoint. Get help if need be. You may think your business is worth a million bucks, especially if you work 24 hours a day trying to make it happen, but if you have a family, you are only dragging them in deeper and deeper into a business quagmire. You need to differentiate between what is a “hobby” or “specialty” and reality. If you love what you do, then do it on the side.

Bottom line is, if you are in a failed business, shutting down and flipping burgers at Mickey D’s is more helpful to your family – you are getting paid and bringing home a paycheck. If you set up your business correctly (i.e making sure you and your business are separate entities) you can settle the issues with your business and not have it impact you personally – hopefully.

CIRCUMSTANCES BEYOND YOUR CONTROL

Of course, things can happen to you that are out of you control, i.e. losing your job, being hit with a bad illness, being in an accident resulting in an inability to work, etc. I’M NOT DIRECTING THIS TO YOU. This is for people who either may not know what to do – I just offered you some guidance, from the perspective of your children who will be at the receiving end of this. I am also directing this to people who LIVE BEYOND THEIR MEANS. If you don’t believe that you live beyond your means, I give you this test: If you get a lump sum of money (i.e. perhaps a tax return, a nice gift from someone, a bonus at work, etc), before you dump it into a really nice vacation, or put some unnecessary work into your house, or a high tech do dad you really don’t need, etc ask yourself: “are all the important needs of my family met?” “Am I living on my credit cards?” “Do I live paycheck to paycheck and have no savings?” If you answered YES to any of the above, then take your lump sum of $$ and go to a financial advisor ASAP.

Your children in their 40’s with young children themselves, trying to do the right thing, will thank you for it.

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