September Financial Checklist: The Back to School Edition!

Back when I was in school, there were many times I would learn a concept and wonder whether I would ever apply that knowledge in the “real world”. Did I really need to know about derivatives beyond Calculus class?

With intense competition for college acceptances, jobs, and career advancement opportunities, my education sometimes felt like more of a checkbox towards a final destination instead of the pursuit of becoming a more well-rounded and respectable individual.  

This year I’ve found myself revisiting the value of my education more than I ever have in my post-college years. 

• Understanding the history of systemic structures in place today
• Critically reviewing and evaluating research methods
• Comprehending statistical measures and data representations
• Awareness of biological, mental, emotional, and psychological responses 
• Understanding the mechanics of our economy and governmental policies

In some ways, it feels nice to revisit some of the concepts I had brushed under the rug for many years. It’s a reminder that our education is not only a means of getting ahead in life but an investment in becoming a better, abiding citizen in our community.

As many parents and families begin a new school year in the midst of COVID-19, my hope is that the next generation not only sees value in advancing themselves but also the importance of becoming a contributing member to society. 

Ironically, what we don’t see taught in many schools though is financial literacy. Since I started this blog in January, I’ve spoken to several accomplished colleagues and friends who feel lost in their finances or are navigating them alone. My husband and I felt the same way for many years.

In a time where success, stability, and legacy are the pillars of public comparison, wealth management seems to be the silent kryptonite among Americans. We don’t talk about our financial health, even though 40% of Americans would struggle to come up with $400 for an unexpected expense. We don’t talk about retirement planning, even though fewer than 4 out of 10 Americans feel their retirement savings are on track. We don’t talk about the rising wealth gap, and how the middle class has continued to get squeezed over time. 

I began writing about personal finance because I wanted to open up the conversation about money. Social norms teach us that talking about wealth, finances, and money is insensitive. Personal. Rude. Invasive. Uncomfortable.

​It’s time we think about changing our approach to finances and share more knowledge, ideas, and strategies instead. 

​This month I’ll be covering topics around financial literacy. Many of our fears are rooted in what we don’t know. With a little education, we can all make more well-informed decisions and improve our potential for financial growth.

September Monthly Checklist

This summer we saw a remarkable market recovery amidst a restless economy. Those who stayed the course and did not let panic or fear get the best of them were the true winners this season. 

Now that we've reached all-time highs again, it's a good time to review your portfolio of assets and begin planning a course of action for the upcoming year. 

Here is my monthly financial checklist for September!

1. Track monthly income in expenses

Last month I introduced an annual spending plan that can help you understand your current cash flows and spending habits. As we begin to near the end of the year, establishing a baseline can help you get into gear for 2021 with more control over your expenses and savings goals. ​
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2. Review your asset allocation

This past week, the Fed announced a major policy shift that would allow inflation to run higher than its annual target of 2% to support the economy. This could result in a continuation of low interest rates even when the economy shows signs of improvement. 

Low-interest rates can offer several opportunities to minimize or leverage debt. However, low-interest rates also have the potential to suppress future market returns. 

If inflation does indeed run higher in the coming years, you’ll want to be more vigilant about protecting the value of your money. Holding your cash in a low-interest earning savings account could diminish the value of your dollars if the interest rate is below the inflation rate. 

The inflation rate should be the benchmark that we all strive to beat. Make sure you are structuring your assets and net worth goals accordingly to avoid falling behind.  

3. Consider inflation-resistant investments

When time is on your side, there’s value to riding out the market for long-term gains. Even if inflation rises for a period of time, we should trust that the Fed will pull the reigns before the economy goes off a cliff. 

With that said, there are more investment opportunities we have available to us today which can help us to continue diversifying our portfolios as well as invest in defensive assets. 

Real estate is a popular asset to invest in during times of inflationary pressure because prices tend to appreciate with inflation. The real estate market right now is hotter than ever right now due to low-interest rates, the desire for more space, and many winners who profited from a strong market comeback. If you’re considering a new home or investment property, make sure it is a sound investment for your financial journey first. 

If buying or owning a new property is out of the picture, there are still many other ways to capitalize on inflation resistant assets such as commercial real estate and agriculture through crowdfunding. The private market has evolved tremendously over the past 8 years, allowing retail investors like you and me to partake in many different deal offerings and funds. 

Even though timing the market is not recommended, finding new ways to continue diversifying your assets when you have the capital to do so can help minimize your downside in the long run. 

Fear is the Enemy of Progress

Many people approach their finances with a sense of fear and I am no stranger to that feeling myself. Luckily there are many tools out there now that can help us manage our expenses, create diversified portfolios, and even invest in deals that we’ve never been privy to before. 

These technologies can help us bridge the gaps between our foundational knowledge and the complexities of financial planning, markets, and deal structures. It’s a powerful shift that we should not take for granted. 

As we enter a new season, let’s turn a new leaf and open the conversation about financial wellness. We all have something to gain and learn from each other. 

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