Early in my career, I had several instances of folks canceling their appointments with me last minute. Some were for emergencies with work or family, and some were for reasons such as “not being prepared to meet” or “not sure this is the avenue I want to take” or, in rare cases, saying nothing at all. It was easy to take that personally, but over the years I have come to realize that such cancelations or procrastination in general when meeting with a professional financial planner is often driven by fear.
Let me give you some context. When someone has a financial problem today, they often will hit the internet—Google, YouTube, a blogger whom they follow for answers. When answers are harder to come by, they might call a trusted friend or family member and ask for help. Getting even to this point takes time; the question may be put back on the shelf for another day. But let’s assume it is a big issue, like buying a new home and figuring out how to finance two homes for a time. This person will need answers, soon, and a professional advisor to help. From here, they may ask for a referral or hit up Google again for folks to call—but then it comes the call, scheduling, and SHOWING UP to the appointment. They have gone through five or more steps just to get to appointment day, and now they are ready to cancel.
Why? We live in a world where finances are not often discussed, even amongst our closest family. We have been taught that you don’t discuss it, and then we are bombarded for years with the Joneses’ owning the next big, expensive item. Facebook and Instagram have shown us the best of other people’s lives; and by comparison, we feel inadequate, even if our financial road has been relatively free of detours. This feeling can make it difficult to approach a professional and lay out our financial truth. But I am here to say that it doesn’t have to be.
As an advisor, I pride myself on being neutral. Your financial life up to today is what it is, and we cannot change those facts. If you have debt, feel like you should have saved more, are late to the game, or have gotten this far by sheer luck, it does not matter. In fact, it does not change who you are as a person. If you are asking for guidance, any great advisor will take the time to educate you on what they feel is best for your situation and will strive to make you feel at ease.
Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.
COVID-19 has impacted jobs across all sectors, and State Unemployment Agencies are reporting an unprecedented backlog of claims. We have been hearing from our clients of a desire to assist their adult children financially. Many of the questions include how and what kind of support to provide and if it makes sense. If you are in this situation, here are some ideas on how to temporarily assist your adult children during a financial emergency.
Start an emergency cash fund for your child.
Make a one-time deposit or smaller, more frequent deposits to a high-yield savings account (like Flourish).
Fun idea: Many banks or credit unions offer change deposit programs. They’ll round up your debit card purchases and transfer the extra change to a savings account. Think of it as a “Change Jar.” It adds up quicker than you think!
When your child encounters a financial emergency, make one-time distributions or loan them the money. Anything they payback can be put back into the savings account for future needs.
Gift them highly appreciated shares of stocks or mutual funds from your Non-Retirement accounts.
It could potentially benefit you by helping you avoid the capital gains tax if you sold the shares while they were still in your account.
After the shares are gifted to your child, they can choose when to sell the assets, and they will incur any capital gains tax on what is sold. Structuring your giving this way can potentially reduce taxes for the family.
Discuss this option with your Merriman Wealth Advisor to make sure it fits into your Financial Plan.
Offer small cash loans to cover emergency expenses.
Discuss a payment plan that can start once your child’s financial situation improves.
If mutually agreed upon, an interest-free loan with a small monthly payment is still more helpful than anything any bank could provide to them.
It never hurts to have the agreement in writing and signed by both parties.
If you can’t provide an infusion of cash, little gifts can still make a big difference!
Give gas or grocery store gift cards when you can.
Meal prep large casseroles or frozen meals that can be heated quickly and serve many portions.
Offer childcare when you can.
Help them review all options in their own financial life.
They may be able to take a special distribution from their own IRAs or 401(k)s for hardships due to COVID-19.
Do not co-sign a loan for your child. As much as you want to help them, you could become liable for the loan, and it can negatively impact your credit history.
Do not ignore the tax ramifications of using retirement assets such as IRAs or annuities to give cash to your child. These assets can be taxed as ordinary income and have the potential of significantly increasing your income tax liability.
Do not stretch your own finances too thin. You need to protect your financial security first. We always recommend discussing large gifts with your Merriman Wealth Advisor, whether they be to charity or a loved one.
As parents, it can be extremely difficult to watch our children struggle financially and equally as hard to balance helping and overreaching. When making these types of decisions, we find that an objective third party like our advisors can help you make a decision that works for everyone. We encourage you to reach out if you need guidance with how best to help. We are here for you and your family.
Have you ever heard the proverb about the cobbler’s children? It essentially states that the cobbler’s children, although surrounded by well-made shoes, have the most worn out shoes. Or that doctors are the worst patients? The same can be said for wealth advisors. We’re not immune to the common mistakes that exist in the financial world, and even we can benefit from the financial guidance we provide for others.
As a new advisor, I had an epiphany. Yes, an epiphany, as corny as that sounds. I realized that although I could adequately pick investments, decide on a savings plan and develop a strategy for myself, I wasn’t following through with it. While at a client meeting, my coworker explained it best by saying, “We help hold you accountable to your goals.” Duh! That was the thing I was not giving myself. I could make the best laid plan, but I wasn’t following through and doing the actions I needed to do to be successful. I had the knowledge, but needed accountability. The very next day I hired my first advisor. (more…)
Geoff: I was working at TD Ameritrade and Merriman was on our advisor referral platform. I was introduced to the firm by Michael Van Sant, and at one point took a tour of the office. On that tour, I started to feel like this was where I was supposed to work. My colleagues from TD Ameritrade even returned from the visit and remarked it was where I belonged, after they visited the office. I started working at Merriman less than six months later!
Aimee: What do you do at Merriman?
Geoff: I am a wealth advisor, have never been anything else here.
Aimee: What do you love about working here?
Geoff: I love the people. Financial advising is a team sport, and it’s not fun to do alone. I have a lot of fun meeting with clients and having the team to recap the meetings with. Debriefing with the team on how we are doing in helping clients is great.
Aimee: What is a fun fact about you?
Geoff: I was born with club feet and couldn’t really walk until kindergarten, but in high school I ran track and played soccer and basketball. Also, I have a favorite dance move called “The Stomp”. I stomp my right foot to the music, people around me need to watch out for their feet and toes!
Aimee: How do you spend your free time?
Geoff: Everyday my wife, Christina, and I walk our dog, Archie, rain or shine. Otherwise, we enjoy being homebodies or adventuring around Gig Harbor, Washington. I read thriller novels and like to finish the whole series. I just finished a 17-book series. I am also on the investment committees for the Tacoma Employees Retirement System Pension and Greater Tacoma Community Foundation. It is really rewarding to provide advice to institutions and be a part of the action.
Aimee: What’s next?
Geoff: We are expecting our first child in late April (any day now!). I hope to one day take the LSAT and enroll in a hybrid/virtual law program so that I can provide our clients with legal advice too!
Let me play out a scenario for you. You’re a 34-year-old registered nurse, working long hours helping patients in a local hospital. You go home to your husband and two kids, cook dinner, give baths, and play hide and seek. One morning you step wrong getting out of bed. Your foot is throbbing, but you get to work on time. (more…)
At Merriman, we encourage our clients to pursue a fulfilling life. This sounds great, but can sometimes be harder to achieve than we’d like. You might find yourself thinking, “If I only had more time for….”. How many times have you lamented a lack of work/life balance? While our jobs provide the means to achieve some of our goals, but at times, they may stand in the way of personal fulfilment. (more…)