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Old-Fashioned Financial Planning: Save More, Spend Less

In “Our New Investment Reality,” Bert Whitehead, M.B.A., J.D. and Charles “Chip” Simon, CFP® point out that when it comes to financial planning, in some ways, everything old is new again. The two financial experts imagine that without a serious reversal of the changes in the stock market over the last few years, their clients will have to spend more time accumulating or expect to downsize when they retire.

However, rather than feel gloomy because the economy is not booming at the moment, Whitehead and Simon point out that we really have to think about spending less than we earn and make saving a lifelong habit. This was they way people lived in past generations and these are good guidelines to follow since you really can’t count on the government or the judicial system to align things in your favor. They add that while you should definitely keep up with your Social Security benefits, you should not rely solely on those.

Whitehead and Simon also write “it becomes imperative that we teach our children these important basics to survive in the new reality:

 • Each family must produce more than they consume.

• Our futures depend on saving at least 10% of our earnings throughout our lifetime to support us in old age.

• Future citizens will have to recognize that longer life expectancies will mandate older retirement ages.”

And while saving and not spending more than you earn is the kind of good, sound advice from your grandparents’ day that still holds true now, there are some things going on now that weren’t happening in your grandparents’ time. So while you need to practice sound financial management on a daily basis, you can also seek the help of a qualified Fee-Only financial planner who can keep an eye on your overall financial outlook.