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It’s that time of year again! Time to reflect on the past and eagerly anticipate the opportunities that the new year brings. This month, Thrive explores the key pillars that support a successful and secure lifestyle for you and your family.
When it comes to financial health, the focus should extend beyond mere budgeting and encompass a comprehensive strategy for the future. From insurance to taxes, banking to investing, we’ve curated insights and expert advice to guide you. As the saying goes, “Failing to plan is planning to fail,” and with this mantra in mind, you can be empowered with the knowledge and tools needed to navigate the often complex landscape of personal finance.
Here’s to a year of financial empowerment, smart choices, and a flourishing, worry-free future!
Preparing Today for Tomorrow: Financial Freedom is Closer Than You Think
by Tori Hebert
A new survey conducted by Forbes Health reported that 38% of respondents want to make improving their finances a top priority in 2024. Paying off debt or developing a budget may seem like daunting tasks, but financial coach Jacqueline Higginbotham says it’s easier than you think.
“The easiest way to achieve your financial goals is to start small,” says Higginbotham, owner of JLH Financial Coaching, LLC. “If your goal is to pay off debt, pay off your lowest balance first and work your way up from there.”
Creating goals that are achievable and relevant to your specific needs is important to keep you from being discouraged. Each small step is leading you to the next which will result in larger goals coming to fruition.
“It’s important to keep in mind that whatever your financial situation is didn’t happen overnight, and it won’t change overnight,” says Higginbotham. “The most important thing is to keep trying. Don’t give up and don’t be hard on yourself if you must extend a goal longer than you wanted to. The progress you make every day will make a difference.”
Before you send your money out, make sure you know how much is coming in. Creating a budget is the best way to manage your expenses and make sure you have enough money each month for your lifestyle needs.
“Having a budget not only helps you stay on track with your goals, but it can help you find hidden expenses or show you the root of your financial struggles,” she says.
Subscription payments can quickly add up and become wasted cash if you are not routinely using those services. Even the smallest expenses can become a problem over time. Higginbotham says budgeting isn’t meant to be restrictive or a punishment, but rather a guide to your savings plan.
Perhaps the most important thing you can do to gain financial freedom is to create an emergency fund. Having an emergency fund can give you peace of mind when unexpected expenses come up. “Being in Louisiana there is always the possibility for a disaster to strike. Having money put to the side will allow you to cover travel expenses, food and gas without impacting your everyday spending cash.”
Consider starting your emergency fund with any extra money you receive. Your income tax return, the percentage increase from a raise, or any money you receive from selling an item are all simple ways to begin building your savings.
“If you can immediately put this money to the side, as if you never received it, you won’t be tempted to spend it,” says Higginbotham. “Plus, this will support you to continue working towards your financial goals by keeping your current budget in place.”
Just like any goal, having an accountability partner can be beneficial. “We are here to support you and help you learn. It’s up to you to work the plan to make your dreams come true.”
Bank the Best Way
by Taylor Trahan Henry
Community banks go beyond traditional banking services; they support local businesses with personalized banking services, actively engage with the community to promote financial literacy, and are often economic drivers in the communities they serve.
“The key lies in empowering customers and communities with the facts, tools, and resources needed for secure banking,” says Lesley Warren McLamore, vice president of private banking with Red River Bank. “This involves preparing the younger generation for successful money management through programs in schools and workplaces, as well as online initiatives to improve financial access for everyone in the community.”
Community banks actively contribute to financial education by volunteering and offering free seminars, credit clinics, and online courses. Red River Bank provides various opportunities for individuals to enhance their financial literacy, covering topics such as identity theft, credit repair, and first-time home-buying.
“Choosing a local bank over larger financial institutions offers several advantages,” she says. “Your local banker often has a better understanding of the local market and can provide personalized, one-on-one coaching to meet specific financial goals.”
When it comes to setting financial goals for the year ahead, McLamore recommends a three-pronged approach. First, she emphasizes the importance of starting an emergency savings account, especially in regions like Southwest Louisiana that have faced various challenges, from the pandemic to natural disasters. Second, paying down high-interest debts, such as credit cards, remains a top priority. Lastly, McLamore advocates for meeting with a local community banker to discuss and kickstart a retirement savings plan.
“If you’re looking to make a plan for the upcoming year and aren’t sure what step 1 is, it is absolutely learning the basics of financial literacy,” says McLamore. “Seek out those community resources to learn all you can.” Through partnerships with initiatives like Bank On, Red River Bank further emphasizes their commitment to expanding banking access for local residents.
Accessibility is key! In today’s digital world, community banks are combining the convenience of technology with face-to-face contact, ensuring that customers receive the best of both worlds.
To create a solid financial plan for the coming year, there are a few essential steps. “Establishing clear goals, creating a budget, and starting to save, no matter how modest the amount, are crucial,” says McLamore. “Additionally, understanding and monitoring your credit score, along with teaching financial literacy to the younger generation, are pivotal components of a comprehensive financial plan.”
There has been a lot of discussion on interest rates in the upcoming year. It’s important to understand as interest rates play a significant role in savings and investment strategies. “Getting personalized advice from community bankers who can guide individuals through decisions ranging from paying down credit card debt to investing in competitive certificates of deposit is important,” she says.
In times of economic uncertainty, McLamore always recommends a proactive approach. “Understanding one’s current financial situation, reviewing bank accounts and statements, and creating a personal financial statement are essential steps,” she says. “Formulate a plan that ensures your financial goals align with your current circumstances.”
As an added tip, she emphasizes the importance of being vigilant against fraud. “Simple yet effective measures include setting card alerts, understanding bank policies for check fraud, and being cautious with online communications,” says McLamore. “Your bank is a valuable ally in the fight against fraud, providing guidance and support to keep individuals and businesses safe.”
Your bank isn’t just a building, it’s full of knowledgable staff ready to assist you in establishing or improving financial stability. They are trusted partners in the pursuit of financial well-being for individuals, families, and the community at large.
A Year-Round Guide to Organizing Your Finances
by Taylor Trahan Henry
The new year is here, and it’s the perfect time to implement small habits that make a big difference! These tips can help you in setting the stage for a stress-free tax season come year-end.
Establish a Dedicated Workspace
Creating a designated area for handling financial matters is the first step to getting organized. Set up a home office or a specific corner where you can keep all your financial documents, receipts, and important paperwork. Having a centralized space will make it easier to locate necessary items when the time comes to prepare your taxes.
Keep Track of Income and Expenses
Maintaining a real-time record of your income and expenses is crucial. Utilize budgeting tools, apps, or even a simple spreadsheet to track your financial transactions. Categorize expenses to streamline the process and make it easier to identify deductible items during tax season.
Make the most of technology to simplify your financial record-keeping. Use apps or software that allow you to scan and store receipts digitally. Many tools also integrate with your bank accounts and credit cards, automatically categorizing transactions and providing a clear overview of your financial health.
Set Reminders for Important Dates
Avoid last-minute rushes and missed deadlines by setting up reminders for key financial dates. Mark your calendar for quarterly tax payments, filing deadlines, and any other financial commitments. Proactively staying on top of these dates will prevent unnecessary stress and ensure you meet all your obligations on time.
Organize Receipts and Documents
Keep all relevant receipts, invoices, and financial statements in an organized manner. Use folders or envelopes to separate them by category, making it easier to locate specific documents when needed. Having a structured system in place throughout the year will save you from a frenzied search when tax season arrives.
Maximize Deductions and Credits
Stay informed about tax deductions and credits that apply to your situation. This knowledge can help you make informed financial decisions throughout the year. Documenting potential deductions as they arise will save time and ensure you don’t overlook any opportunities to reduce your tax liability.
Regularly Review and Adjust
Financial situations can change, so it’s essential to regularly review and adjust your financial strategy. Assess your budget, update your records, and ensure that your financial plan aligns with your current circumstances. This proactive approach will make the year-end tax preparation smoother and more accurate.
Consult a Professional
If taxes remain a complex and daunting task, consider seeking the assistance of a tax professional. A qualified accountant can provide valuable advice, ensure compliance with tax laws, and help you maximize your deductions. Establishing a relationship with a tax professional early in the year can be beneficial for ongoing guidance.
By incorporating these organizational strategies into your routine, you’ll not only streamline the tax preparation process but also gain a clearer understanding of your financial well-being throughout the year. Remember, the key to a stress-free tax season is proactive planning and consistent financial management.
Navigating the Insurance Landscape
by Taylor Trahan Henry
It’s not secret to anyone in Southwest Louisiana that the insurance market is tumultuous at the moment. Regardless, everyone has to have it. It’s a necessity and viewing it as a tool in your financial toolbelt can help reframe your mindset on protecting your assets. Local State Farm agent, Jennifer Mabou, says there are ways to ensure you’re in the best shape possible when it comes to your protection portfolio.
“Review your deductibles across the board and consider incorporating them into your budget or emergency fund,” says Mabou. “By doing so, you not only gain a clearer understanding of your financial obligations in the event of a claim but also create a proactive strategy to manage unexpected expenses.”
Furthermore, she emphasizes the importance of revisiting policies with your agent regularly. “Ensure your coverages are correct and adequate, and that you’re getting the best pricing available in the market.” This not only safeguards your assets but also ensures that you are not overpaying for coverage you may not need.
For those committed to safe driving practices, Mabou suggests exploring Safe Driving telematic programs. “Safe drivers can benefit from better discounts through these programs, providing a win-win scenario for both the policyholder and the insurance company.”
Lastly, never underestimate the power of documentation. “Re-inventory your home, apartment, and/or shop with photos or videos,” Mabou advises. “Having a detailed inventory can expedite the claims process and ensure that you receive fair compensation for any losses.”
In the midst of a challenging insurance landscape, staying informed is crucial. “Pay attention to the crisis,” Mabou urges. With insurance markets tightening at a rapid pace, it’s essential to be proactive in understanding the factors contributing to the challenges faced by the industry.
So, what’s to blame for the current market? Mabou highlights the rising costs of auto and homeowner claims, the escalating expense of rebuilding homes due to supply chain issues and labor costs, and the surge in Bodily Injury claims from auto accidents. “Be in the know, contact your elected officials, and be aware of the discussions regarding possible solutions.”
Amidst the uncertainties, there are proactive steps homeowners can take to fortify their properties. The Louisiana Fortify Homes Program (LFHP), offering grants of up to $10,000 for homeowners to repair or replace their roofs to the FORTIFIED Roof™ standard.
“The FORTIFIED Roof™ standard, established by the Insurance Institute for Business & Home Safety (IBHS), strengthens buildings against severe storms, high winds, and wind-driven rain,” explains Mabou. Homeowners who meet eligibility requirements can benefit from discounts offered by most insurance carriers once a Fortified Roof has been installed.
For more information about the LFHP and to explore available discounts, homeowners are encouraged to visit www.ldi.la.gov/fortifyhomes and consult with their insurance agent.
Remember, an informed and proactive approach to insurance can make all the difference in safeguarding your family’s well-being.