5 Tips to Help Alleviate Financial Stress

The financial stresses of the past few years can lead to a learning moment that we can use to make ourselves more financially literate and more prepared for the future.

1. Guaranteed Interest Options

As interest rates have increased and banks have had some challenges, it may be time to look at guaranteed interest options available at the bank level, money market accounts or treasuries. Instead of leaving cash in the bank where it might make less than 1%, you can take advantage of options that have guaranteed interest. However, make sure that any options you look at are principally protected and that you understand FDIC guidelines when it comes to funds held at a bank (insured up to $250,000 per taxpayer ID per bank).¹

2. Inflation

Inflation can puncture budgets and can be a thief of retirement income. Since 2000, Social Security Cost of Living Adjustments have lost 40% of their purchasing power to inflation.² Inflation most likely won’t remain at these record highs, but it is still very impactful on how far your retirement dollars will go as time goes on.

3. Teens Are Unprepared

Only 52% of teens passed a test for teen financial literacy.³ Our public education system is working on teaching young people financial literacy, but oftentimes that isn’t enough. Take actions to teach younger generations good financial habits and inform them about topics they’ll need to consider as they grow into adults, including: household budgeting; establishing an emergency fund; student, cars and home loans; and saving for retirement.

4. Longevity

People are living longer and longer lives. For a typical couple retiring at age 65, one spouse will likely live to be 94.⁴ Risks like inflation and long-term care become a tremendous risk over a period of 25-30 years of retirement.

5. Retirement – the major financial mystery

Only 21% of Americans feel that they know enough to effectively plan for retirement. It is the greatest point of financial confusion. Compare that to over half that report they are comfortable with saving money, and almost half say they are comfortable with banking. But when it comes to preparing for retirement, most feel they are not equipped to plan for their retirement.⁵

The professionals at Brogan Financial are here to bring you great information so you can make informed and prudent decisions that can impact the quality of your life.