Staying out of the red with lifetime financial health: Grow, manage, maintain!
By Allison McCrory / Photo by Kate Treick Photography
We update our approaches to fitness, skin care and fashion as we go through life. Jacey Cosentino, a financial advisor with Pensacola’s Edward Jones Peacock Wealth Management, offers recommendations for strengthening financial health for a lifetime.
Growing. Managing. Maintaining. Those three verbs are key to financial fitness, Cosentino explained. It is a long game with different strategies for different life stages.
GROWING MONEY
Short-term goals include things like saving three to six months of emergency living expenses in a low-risk fund. It’s not a matter of whether an unexpected expense or even job loss will occur, but when. Saving for vacations and paying off debt are additional short-term objectives.
To expedite growing money, Cosentino suggested tracking income and expenses to understand spending habits, creating a realistic budget to allocate funds toward goals while maintaining day-to-day living and generating surplus cash flow for investments or savings.
One of the best ways to grow wealth is to pay off debt.
To do that, prioritize paying off high-interest debts, investigate refinancing or consolidating loans for better interest rates and strike a balance between paying down debt and investing for growth. It’s difficult, but the result will be exhilarating!
MANAGE YOUR HARD-EARNED MONEY
Medium-term goals might include buying a home, funding education or starting a business. Investment planning is intimidating for many. Start by personalizing your needs.
“Develop an investment strategy based on risk tolerance, time horizon and goals,” Cosentino advised.
Diversify across asset classes such as stocks, bonds and real estate. Then regularly review and rebalance portfolios to maintain alignment with goals.
Maximizing finances using deductions, credits and tax-advantaged accounts such as 401(k)s, IRAs and HSAs can stretch and preserve money.
MAINTAIN GENERATIONAL MONEY
Long-term goals focus on retirement planning, wealth transfer and achieving financial independence.
“Estimate retirement income needs and establish a savings plan,” Consentino advised. “Contribute to employer-sponsored plans and individual retirement accounts.”
Look for ways, such as rental properties or annuities, to supplement retirement income and review insurance costs and coverage regularly to ensure they provide adequate coverage at a fair price.
Estate planning includes creating and updating wills, trusts and powers of attorney. Name beneficiaries and establish healthcare directives.
“Plan for efficient wealth transfer with minimal taxes,” Consentino said.
Review financial plans regularly and stay informed of financial trends, she recommends.
“A holistic approach to financial planning involves integrating these elements to create a sustainable and flexible strategy for achieving both short-term and long-term wealth-building goals.”
LIFETIME FINANCIAL TIPS FROM JACEY CONSENTINO
Early Career (20s–30s)
Focus: Building a foundation
Budgeting: Establish good money management habits and track expenses.
Debt Management: Pay off high-interest debt (for example, credit cards and student loans).
Emergency Fund: Save 3–6 months’ worth of living expenses for unexpected events.
Retirement: Start contributing to retirement accounts (for example, 401(k), IRA) to leverage compounding.
Insurance: Secure basic health, renter’s, or life insurance if needed.
Investing: Begin investing in diversified assets, taking on more risk due to a longer time horizon.
Mid-Career (30s–40s)
Focus: Growing wealth and protecting assets
Family Planning: Account for expenses like children’s education, housing and family needs.
Retirement Savings: Increase contributions to retirement accounts, aiming for 15–20% of income.
Insurance: Reassess needs (for example, life, disability and health insurance) to protect dependents.
Estate Planning: Draft a will, designate beneficiaries and consider creating a trust.
Investments: Maintain a growth-oriented portfolio but diversify as responsibilities grow.
Peak Earning Years (40s–50s)
Focus: Securing the future
Catch-Up Contributions: Maximize retirement savings, especially if behind.
Debt Reduction: Pay off mortgage and other long-term debts.
Education Savings: Fund children’s college education through 529 plans or similar accounts.
Asset Protection: Explore umbrella insurance and reassess risk in your portfolio.
Wealth Management: Consider working with a financial advisor to refine investment strategies.
Pre-Retirement (50s–60s)
Focus: Transitioning to retirement
Retirement Planning: Finalize income strategies, including Social Security, pensions and withdrawals.
Healthcare Planning: Budget for healthcare and consider long-term care insurance.
Portfolio Adjustment: Shift toward lower-risk investments to preserve capital.
Debt-Free Living: Aim to be debt-free by retirement.
Downsizing: Assess housing needs and consider downsizing to reduce expenses.
Retirement (60s and beyond)
Focus: Preserving wealth and ensuring longevity
Income Management: Implement a withdrawal strategy (for example, the 4% rule) to avoid depleting savings.
Healthcare Costs: Budget for Medicare premiums, out-of-pocket expenses and long-term care.
Estate Planning: Update wills, trusts and advance directives regularly.
Lifestyle Adjustments: Prioritize spending on experiences and needs while staying within budget.
Gifting & Legacy: Plan charitable donations or family gifts if desired.
