Revisiting the Ghosts of Your Financial Past
Updated December 08, 2023
Congratulations! You are in the home stretch of 2023. If you pull out your list of goals in January and have the guts to compare them to where you are now, you can do a solid review and benchmark of the year. Whether your financial year was amazing or your 2024 can’t get here fast enough, now is a good time to revisit the ghosts of your past financial actions.
These are the lessons you may or may not have learned but probably should have, based on previous experiences. Face it: we aren’t born knowing how to handle unexpected financial situations — or routine ones for that matter. And the truth is that most of us struggle to get a grip on them even as adults. But we can and should learn what to do — and then do it — so that we’re in a better position for a secure financial future.
In my practice, I see a wide variety of past financial actions that rise again to cause problems. Yours may be mundane or exceptional; either way, it helps to know how to handle these issues and even prevent them whenever possible. Here are the Top 5 Ghosts of Financial Actions Past that I observe with my clients.
Ghost #1: You lost your job or had to float your living expenses until you got a new job, or you had a large and unexpected expense. In order to make ends meet, you had to run your credit card up or take a 401k loan.
Next time: Make sure you fund an emergency account with enough easily accessible cash to cover your living expenses for three to six months (more if you have dependents). Emergencies happen, but they don’t create as much stress or long-term financial detriment when you have funds set aside for just such an occasion.
Ghost #2: You and your spouse have talked about updating your will and estate planning documents. You even had an attorney chosen, but you never quite got around to having the attorney draft new documents.
Next time: Get the legal intake form, your balance sheet and life insurance schedule to the attorney and catch a phone call or meeting to get the redrafting process started. It’s a minor hassle in the big picture and far, far less trouble than your family would face if you were to die without having done it. Bonus points: Have your advisor hold you accountable here.
Ghost #3: You meant to add a life insurance policy to supplement the coverage you get through your job. Then you realized that you had what you think is a minor health change. The insurance company, not so much. The policy premium didn’t come out as you had expected.
Next time: Start early to maximize your chances of insurability outside work. If your health status has changed, so what? Write the policy anyway, unless for some reason your survivorship needs have suddenly changed.
Ghost #4: You kept meaning to save money in your retirement account, but you never got serious about it. Now you just had your 40th birthday and the accumulated funds in your IRA amount to less than one year of your current income.
Next time: There is no next time. It’s ideal to begin saving early, but you are where you are. Keep putting money in there, and if possible, increase the amount you’re contributing. It’s never too late, but the later it is the more urgent your need to create significant retirement assets.
Ghost #5: It came time to write a check for your kid’s first year of college tuition, but what with one thing and another you hadn’t actually been saving for it. Hey, kids are expensive! And yet, so is college.
Next time: For now, do your best to pay what you can from current income. Also remember that working while in school offers valuable experience as well as helping students feel invested in their education. In the future, earmark an account for this or considered using a 529 plan to save for younger siblings or grandkids, so that the accumulated savings can grow tax-free.
The best thing you can do is to learn from these ghosts of financial actions past. Don’t beat yourself up; just focus on doing better from here on out. If possible, retain a professional advisor who can keep you accountable to your goals, especially as you get ready to begin a new year in 2024. I hope you and yours have a wonderful holiday!
Meredith Moore is a 20-year veteran of the financial advisory industry who specializes in bringing a customized approach to support the highly personal dynamics that govern her clients’ relationship with money and success. She is the recipient of numerous industry awards and a noted speaker and writer focusing on the intersection of power, money, and gender within relationships. Ms. Moore can be reached at www.artisanfsonline.com.
Meredith C. Moore of Moore and Artisan Financial Strategies, 1125 Cambridge Square, Suite C, Alpharetta, GA 30009 (770) 587–0281.Learn how to take control of your financial life and discover what makes women’s financial planning needs such a unique challenge with our free, white paper: https://www.artisanfsonline.com/.19.htm
