David Lerner Associates: 4 Financial Planning Tips

David Lerner Associates: 4 Financial Planning Tips

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October is Financial Planning Month. The future of a person’s family, as well as their own safety and security, may be at risk if the right steps are not taken to ensure financial stability. As life goes on, financial demands increase – it starts with providing a roof over one’s head and grows to school fees, medical costs and the need for retirement.

The steps to financial stability may be a different journey for each individual, as a person’s choices will differ, but these four basic tips may help make more informed choices.

1. Spend the right amount on your place of residence:
The common rule of thumb is that a mortgage or rental paid should not be above 30% of your income. This figure that a household can spend on housing costs before it becomes “burdened” evolved from the United States National Housing Act of 1937.

However, the price of homes, as well as the demand for places to live in cities, means that this may no longer be realistic. The cost of housing in the suburbs, or a more rural location, may make it more affordable. On the other hand the cost and time spent commuting must also be factored into the budget.

In this age of rapidly advancing technology some firms allow, or even encourage, telecommuting, so working from a home office could be what makes is possible to spend less on accommodation and enjoy a better lifestyle

2. Set goals:

Having a specific financial goal can make the difference to achieving success. This is true both in life and in business. Without a goal or target in sight it may be impossible to gauge success or failure. Setting a target gives the opportunity to break it down into smaller steps that are achievable, so the end goal can be reached.

For example, if the goal is to buy a house don’t phrase the goal as “save a down payment.”  Make it specific.  Figure out what the price of the home would be and the down payment. Then decide how much you can realistically save towards that each month.

Cost of the house: $250,000.  Down payment: 20%.  The goal would be to save $800 a month for five years.

3. Have a fund for emergencies:
Setting money aside for emergencies, such as a big car-repair bill or a visit to the emergency room, is essential. Few people manage to go through a lifetime with no incidents at all. The goal should be to have six months’ worth of expenses in the fund. Unfortunately, the majority of Americans (about 75%) have not managed to do this.

Even if the emergency never materializes, this money could be used for college tuition or to bolster one’s retirement account. An emergency fund provides peace of mind – no matter what happens, there is a financial safety net. It’s much better than increasing debt levels to cover the emergency when circumstances are already stressful.

4. Invest wisely, not emotionally:
Instead of chasing financial rainbows aim for the “Sensible middle-ground of investing.” [4] Investing on a whim, or because the scheme sounds like a good idea, is like betting on a racehorse with a name that sounds good. Just because the horse is called “The Luck of the Irish” does not mean it’s going to win.

Talk to an investment advisor. Evaluate the risks and possible benefits. Read the fine print on any investment prospectus and make a decision after careful consideration.

Following these four tips can improve one’s financial future.


Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.

Member FINRA & SIPC.



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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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