Financial planning is stressful. For many, it seems easier to avoid the subject than get started with a sound strategy. Kristen Euretig, a certified financial planner and founder and CEO of Brooklyn Plans, focuses on getting clients over their psychological hurdles and introducing them to the “exciting and interesting and empowering” benefits of financial planning.
Here, she shares some of her tips for those with financial ennui:
Know What You Want
Euretig thinks the first question for anyone getting serious about their finances is: “What do you want to do” and the second question should be: “What do you want money to do for you?”
“That’s often the piece that people are missing,” Euretig says. Do you want to buy a house in five years? Go on vacation twice a year? Euretig sees money as a tool to help you live the life you want. “That, to me, is the whole point of financial planning.”
Don’t Be Afraid To Get Started
“Sometimes people let perfect be the enemy of good,” Euretig says. If you aren’t in a position to pay down debt and save for retirement and start a rainy day fund, don’t let that discourage you from taking incremental steps in the right direction.
If you don’t have any savings now, set up an account and make a goal of putting aside $100. Once you get there, raise the goal to $500. Keep challenging yourself and watch savings add up.
Ask Where You Stand
“I think what a lot of people want to know is ‘am I normal? How much do most people have saved? How much debt do most people have?’ And I don’t find that to be a helpful metric.”
“So, do you know what comes in each month and what you cost to live? And I don’t mean just your rent and your utilities, but your food and your laundry.” Breaking that down further, she recommends asking how much you know about your total debt, interest rate and minimum payment. And is that information easily accessible to you? And are you focusing on paying down the highest-interest debts?
She recommends people evaluate themselves based on the level of clarity they have about their finances. Are you very clear, “kind of” clear or clueless? “You can’t go forward with a strategy until you know what’s happening.”
Whether you do it on a weekly, monthly or biweekly basis, make savings an automatic transfer. Schedule a regular deposit into a high-interest savings account with no fees and no minimum balance. “There’re too many things we can get distracted by, and other things we want to spend our money on. If you have it come straight out of your account, ideally when it hits, then that’s a pretty fool-proof way to save.”