Do I Have Enough?


Key Takeaways

  • “Do I have enough?” is the most frequent question I get from clients and prospects.
  • Many of life’s important financial decisions come down to your cash flow, balance sheet and taxes.
  • But there’s often an emotional or nonfinancial aspect to consider—needs versus wants.

*** Encourage close friends or family members to take advantage of our complimentary second opinion service

Remember back in the early- to mid-2000s? People were spending up to 60 percent of their incomes buying homes that were way too large and expensive for them. The question of “do I have enough?” didn’t enter into their minds. We shouldn’t have encouraged these folks to get so overextended, as too many lost their homes to foreclosure or other factors when the financial crisis hit. They just didn’t have the cash flow to afford them.

The same thing applies to many of life’s important financial decisions, such as buying a car, buying a first home, funding for college education, funding retirement or funding a continuing care retirement facility. And both financial and nonfinancial issues come into play.

On the financial side, it comes down to your cash flow, balance sheet and taxes, and then running a projection to see what happens to your cash flow if you move forward with a big purchase or investment.

Needs versus wants

It’s also about wants and needs. For example, does your first car have to be brand-new or can you live with a used car that could end up saving you $10,000 to $15,000? Can your first home be a starter house or does it have to be a bigger home? Again, the bigger home may be more comfortable, but it comes with more costs. How about college education? People tell me they don’t want to fund a child’s education fully. “I want my kids to feel a little bit of pain,” they tell me. “I want them to take on a loan” or “I want to make sure they have to work during college.”

Can we afford a second home in retirement or not? Many folks tell me they’d rather rent for a couple of months instead of owning. It really depends on your wants versus needs and then getting down to the hard facts of your cash flow, balance sheet and taxes. These decisions can be emotional, not just financial.

“Do I have enough?” is probably the No. 1 question I hear from clients and prospects. They often need someone to help them think through big financial decisions carefully so they don’t make a mistake. That’s where our second opinion service comes in. Many of life’s most important decisions are both financial (do the projections) and nonfinancial (which way will make me happier?). Sometimes we get stuck in our old ways of doing things or can’t move beyond what we think we’re supposed to do or what the world tells us we’re supposed to do. If you’re feeling torn, we can certainly help you or encourage you to go to your trusted advisor. Ask him or her to walk you through life’s important financial (and related nonfinancial) decisions. You’ll be glad you did.

Until next time, enjoy. Gary

www.coylefinancial.com
800-480-7913 | coyle@coylefinancial.com

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