Where can I go to understand my options when it comes to my money?

Transcript:

Hey, humans! I’m Michael Liersch. This is the About Money podcast, presented by Wells Fargo. I’m a behavioral scientist with a PhD in cognitive psychology who loves openly discussing money to help humans better understand their money behaviors. By understanding our money behaviors, we all have the opportunity to make better money decisions.

In this season, we’re going to talk about how we can all sync up our life and our money. We call it LifeSync^SM. You might be asking yourself, why does LifeSync matter? Well, when we align what we want to accomplish in life with our money, it can clarify whether money is truly working hard for us to get us to where we want to go. But that requires us to be intentional about what we want in our life, the jobs we want money to do for us, and compare it with how our money’s organized both now and in the future. To that end, we’re going to keep each episode under 10 minutes so that you can take immediate action to LifeSync. So let’s get into it.

In this episode, we’re going to answer the question: Where can I go to understand all of the options when it comes to my money? So what I want to do is narrow your focus on the options to get access to information that may be most relevant to you or matter most, especially when it comes to the money you need to live your lifestyle, pay the bills, you know, keep the lights on.

So let me highlight three key options, and then I’m going to give you a bit of a framework when you dig into those options to really get the info you need.

So the three options that I would highlight: First of all, I would really focus on finding a trusted mentor, a family member — so it could be a parent, a spouse or a partner, you know, a colleague at work. You know, so this could even be your HR benefits provider. Whomever this is, find someone that you trust, a trusted collaborator, and ask them, especially if they’ve been there before, the types of things that they’ve considered when it comes to working through their money options and what’s worked for them and what’s not worked for them.

The second source that I would highlight is really going online. And a lot of people really dismiss, you know, the power of Google and search engines when it comes to accessing financial information, but I’m not going to. Once you get some ideas from other people that you trust and that you respect, you know, really looking up some of the things that they mention to you actually can help you educate yourself on the parameters of the types of, you know, ideas, money ideas they’re suggesting you engage in.

And then the third idea that I would give you is really to access a professional. And so whether that’s a professional financial advisor, an accountant, an attorney, whomever that is. Someone who works with money day-in and day-out can be an enormously helpful resource when both asking you the questions about what you’re trying to accomplish with your money and then making sure that the information they’re providing is very relevant to what you want to accomplish.

When you’re thinking about your options that you have, I would use two key buckets to really build out your options.

The first one is really in terms of these shorter-term needs that most humans have. And when I think of short-term needs, I’m not talking about an emergency fund. I mean just being able to transact — pay the bills, go out to dinner, all that kind of stuff. So really, when you’re thinking about those shorter-term needs, you really need to think of your options when it comes to credit. Credit cards are, for most Americans, going to be the most typical way they transact money. So look at the interest you’re paying on that credit, especially if it’s revolving credit. Think of whatever the fees are that exist in the credit card, the points or the benefits you might get. Really look into that. Because based on your behaviors, your actions when it comes to how you transact, you could really have an enormous opportunity to make the most of your money.

Another thing I’d like you to think of when you’re considering this element of these, you know, day-to-day needs that most humans have is that you really need to have access to cash or money. Again, not just in case something happens, but even to provide just that certainty that you can pay the rent, pay the mortgage, pay the utility bill, you know, give gifts you have, go do fun things. So there’s that literal part and the psychological safety that having access to that money will give you. And that psychological safety is idiosyncratic to everybody. So, for some people, it’s having way more cash than you need on hand; for some, it’s having just the right amount.

The second bucket I would think of when you think of your options goes beyond, you know, managing your day-to-day and making sure that you feel psychologically safe. It really gets into are you thinking through all the tax-advantaged ways that you can put your money to work? And that can be pensions. That can be 401(k)s or other defined contribution-type plans. That can be individual retirement accounts. When you look at all the data, so many Americans don’t take advantage of those vehicles, which have true tax advantages, but also some employers match the amount of money that you put into it up to a certain point. So it’s really like in many cases doubling your money when you put the money in. So take a look at that as well so that you’re ensuring you’re making the most of each and every dollar that you have coming in so that you can pay yourself forward to make sure that you’re OK for your lifestyle in the future.

Other things to consider when it comes to your lifestyle isn’t just, you know, the traditional retirement items. It really is things like education for children, grandchildren, whomever it may be. And when I talk to clients, you know, things like educational accounts often come up. And so if you’re not familiar with them, look up what a 529 is, what an UTMA account is. You know, look these things up.

And when it comes to health care and health care savings, especially if you’re employed, look up what an HSA is or an FSA is and see if your workplace supports those types of vehicles. So, so many options available to you.

The reason why I’m going through this with you — and you might be thinking, well, Michael, you’ve just talked about a lot of stuff. I’m googling. It’s all going too fast. I don’t know what to do here. Perfect! I’m glad! Because at least what we’re doing is raising awareness of the items that you could and should be looking into to make sure you’re living your best life.

And why I think that’s so important is a lot of people don’t look into these things and they end up having to, you know, in later years sell things, like a business or a home in order to make it all work. And so if you use these vehicles in advance, perhaps you can, you know, keep that home. Perhaps you can pass that business along to a family member. So there are just so many opportunities to then widen your options if you avail yourself of your options today.

So, with that, I hope you look into it. Remember, talk with a trusted collaborator. You know, look it up online and then find a professional to really unpack your options with so that you can live your best life.

That’s it for this episode of the About Money podcast. Please email us with the topics that you would like us to address at AboutMoney@wellsfargo.com. And if you really like the episode, share it with family, friends, and anyone who listens to podcasts. About Money is produced by Wells Fargo. You can learn more about ways to work with us at wellsfargo.com/aboutmoney. I’m Michael Liersch, asking you to talk about money today.

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