Beyond the Kitchen

Pro Tips: Financial Planning

Pro Tips: Financial Planning

Pro Tips:  a new series on Joy the Baker wherein I ask my expert friends loads of questions about their field and get the nitty gritty for all of us.  

This week I talk to my friend Jessi, a financial planner in Kansas City, MO.  

My hope is that this inspires you to find power in how you deal with your money.  I ask the questions and Jessi drops the knowledge, below.

How can people approach money in three different decades of life, the 20’s, 30’s and 40’s?  

The 20’s are for building and establishing habits.  It’s about recognizing your relationship to money.  Maybe you’re scared of it .  Maybe you have your head in the sand about it. Your 20’s are a time to get directionally correct and establish solid financial habits for yourself.  

Think:  How do you respond to money?  Are you a spender or a saver?  

If you don’t define this in your 20’s you’re not totally screwed… it’s just a good time to start.  

Here are three tips to establish solid habits early:  

  •  Have cash in the bank.  We’re talking about an emergency fund, which is totally boring and zero fun.  Give yourself a goal.  Start by saving $1000 in 6 months.  Consider using a high-interest saving account like Capital One 360.  
  •   Stop living outside your means.  No one likes hearing this.  Stop spending more money than you make.  Pay attention.  
  •   Don’t buy things you can’t afford.  For example, don’t over utilize alluring no-interest credit lines for things you can’t actually afford.  

The 30’s are for getting your stuff together.  Time to adult!  The 30’s are a time to get a solid sense of your long-term and short-term goals. 

  •  Definitely start a retirement plan.  
  •  Have an emergency reserve of 3 to 6 months of expenses.  This mean that you have to have a clear view on what your expenses are.  Think:  What is the risk I’m trying to manage with this savings.  The loss of a job or a health emergency?  What amount of money do you need to manage that risk? 
  •  What do you want to purchase in the next one to two years (a house?  a new car? an amazing vacation?)?  Identify and make a savings plan for it! 

The 40’s are about your earning potential.  Make sure you’re at the top of your earning potential in order to maximize your savings potential and give your investments enough time to sit and accrue before using them.  If you’ve had children, your expenses are really high, because human children are expensive and this is a time when your income really matters in order to keep you on track for retirement.  

The deal is, do your best at every stage.  Just do your best.  Good financial habits are not something you can just get around to when you feel like it.

How do you save when you’re on a tight budget?  

Adjust your expenses.  Making hard choices.  Commit to a monthly savings (no matter how humble) into a high-interest savings account.  

Think: Am I living somewhere (house or city) that I can’t afford?  Housing is people’s biggest expense.  We get caught up in the idea of wherever I land is where I stay.  Don’t be afraid to get creative.

Think about what you’re trying to accomplish with your saving.  Identify your priority and save.

How do you save when you have a surplus of funds?  

A windfall of money should be tied to a goal.  Something that matters to you. Tie a surplus of dollars to a goal and you’re more likely to save it and enjoy the benefits.  

How to you save with an erratic / freelance income?    

Set up a system for yourself where you pay yourself a consistent amount from an account that houses your erratic / freelance income. 

When should you hire a financial planner?  

Hire a financial planner now!  It’s important to know that you don’t have to clean up your finances in order to start the process.  Typically people start working with a planner when they’re in a life transition, but no matter where you are, start now.  A good financial planner will look at your finances, listen to your goals, and help you make good decisions for yourself.

Your financial life does not have to be put on auto pilot or do what everyone else is doing.  Don’t get caught up in the fallacy of peer pressure.  Find a planner that’s willing to listen to your real life goals and do it.


Making Life Count– advice and recourses.    

XY Planning Network financial planners for Gen X and Gen Y.  Is that us? helps organize all of your finances in one place, easily… and you can build in budgets and goals! 

Book:  Happy Money: The science of happier spending

Book:  The Opposite of Spoiled:  Raising kids who are grounded, generous, and smart about money

Let’s Make A Plan! what’s your goal? 

Planner Search find the right planner for you.

Preparing for your first meeting with a financial planner–  know what to bring and what to ask.  

Money Magazine 

Acorns: invest spare change  I (Joy) just started this, myself!  We’ll see!