October is Financial Planning Month: Advisor Tips for Clients

October is a time when the harvest is in full swing for many regions of the country. Harvest time is especially satisfying for farmers who’ve planned, planted and tended the fields all summer long and finally get to enjoy the fruits of their labor. Quite literally.

Similarly, financial security doesn’t just happen overnight, or without a lot of thought, planning and riding out a few storms throughout the seasons of life. Perhaps the metaphor wasn’t lost on those who declared October as National Financial Planning Month.1 

While some advisors may only offer a perfunctory nod to such a holiday, it could present another opportunity to share with clients how they can potentially improve their financial outlook.

Admittedly, our conversations and questions as advisors often focus on the big ideas and investment opportunities. Should we adjust your portfolio to include more large cap funds? Have you made the maximum contribution to your Roth IRA this year? Have you thought about rolling over that 401(k)?

But let’s not forget the basics: those small yet important financial decisions and plans that can have far-reaching implications. During October’s Financial Planning Month, consider reaching out directly or posting on your social media channel to remind clients about practical saving tips that don’t necessarily come up during client meetings.

1. Budget for Holiday Spending

While many associate October with autumn leaves and all things pumpkin spice, it’s also when consumers are barraged with holiday advertising and promotions for upcoming door-buster sales. Of course, setting a monthly budget is a first step, but families are sometimes thrown off track during the holiday season when they don’t account for gift purchases. Encourage clients to set a holiday budget and stick with it.

And be sure to remind them that budgeting for the holiday season goes beyond just gift buying. What about that big holiday meal with their entire family, travel, lodging, shipping or decorations? These types of accompanying expenses have the potential to cost as much as or more than any gifts being purchased. Help clients proactively plan for all their holiday spending.

2. Consider Cleaning House

There are numerous ways to sell items online through popular resale apps and websites. Years of accumulated items often sit unused in a basement or closet that, if sold, could potentially net more than enough to pay for all those holiday gifts. 

Many items can also be donated to nonprofit organizations that can put them to good use. Remind clients that qualified donations may be tax deductible and that they should ask for a receipt if they intend to claim them on their taxes.

3. Get Serious About Paying Down Debt

Another upcoming holiday is New Year’s Eve, that fateful time of year when millions of people make their New Year’s resolutions to improve their health, learn a new skill or quit a bad habit. It’s also a great time to resolve to pay down debt.

Work with clients to help develop a plan for how they can reduce their debt over time. Strategies might include debt consolidation or paying the minimum payment on all the loans except the one with the highest interest rates or payment. Pay extra on that one. Then, when the most daunting loan is paid off, they can continue applying the same payment amount to the next smaller loan, and so on. This can help create a snowball effect over time.

What’s more important than paying down debt? Not taking on more when at all possible. Provide tools that can help clients set a realistic budget. It’s one of the best ways to help clients stay within their limits, assuming they stick to it.

4. Track and Reduce Spending

For all the conversations that advisors and investors have about growing wealth, there are likely far too few about preserving it. In addition to establishing a budget, encourage clients to track all their spending for a month to see which categories they’re spending the most on. Is it eating out? Online shopping? Subscription services?

Some clients may be reluctant to give up some of their comfort habits, thinking that to do so will diminish their standard of living. As any advisor knows, however, a few sacrifices now could be extremely helpful when retirement rolls around. Encourage your clients to limit spending diligently for a month to see how it goes. A short-term commitment may feel less daunting and might help spark some self-reflection. 

If an individual saves or invests an additional $100 each month, compounding interest could turn that seemingly small amount into a significant return over time. Some simple examples of areas where clients could potentially reduce spending include forgoing unnecessary phone or technology upgrades, canceling underused gym memberships or subscription services or eating at home more. Some individuals may already have a strong sense of where they’re overspending but haven’t yet done the math. Helping them identify exactly how much they’re spending on incidental items might be the wake-up call they need.

5. Determine Financial Priorities

Identifying a client’s underlying motivations, attitudes and impulses that might drive poor financial decisions is a key factor in helping them choose a better path. During this year’s National Financial Planning Month, why not help clients explore these areas and prepare for unexpected life events with a values-based approach?

Leverage our award-winning Behavioral Finance Advice (BFATM) program. It includes interactive exercises and prompts to help you take a deeper dive and differentiate yourself and your services. Clients may welcome this new approach. When you use the BFA tools, you can also take advantage of the guidance offered through our BFA-certified wholesalers.

Click below to get started, and begin to reap the benefits of deeper connections with your clients.



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