Circles of Change: Conversations with Dr. Zara Larsen
on Change Leadership and Career Fulfillment
May 4, 2008
“Financial Planning: Getting an A from the “F’s” of Transition”
Guests: Emerson Wiser, Tom Forsythe of Allied Financial Services of Arizona
Anchoring Points:
- Fundamental precepts of sound personal financial management:
- Learn to and teach your children to begin saving at the earliest age possible. Cherish it to become an instinctive skill and habit.
- The first thing you should dedicate budget to every month is what portion to save. Be religious, regular and pragmatically specific.
- Whether your are in or are contemplating a career transition, there is no better time than during a down economy to assess where you are today – including understanding fully the value of your benefits from your current employer (401k, 403Bs and other investment programs, pension status and value, terms and costs of medical, dental and vision programs, life, short- and long-term disability insurance). Could you provide for these yourself, even if just bridging to a new company?
- Become conversant in your current statements and spend time looking at the big picture – the system. Are you balanced? Are you explicit with your risk tolerance? What do or don’t you have? Where does your debt come to play? Consider enlisting a Financial Planner to assist.
- Develop a Personal Financial Income and Expense Analysis (sample):
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Expenses (Budget)
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Guaranteed Income
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Filling the Gap
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Monthly Essential Expenses:
Housing, Food, Car
or Transportation,
Healthcare, Personal
Needs, Insurance,
Taxes
|
Monthly Guaranteed Income Sources:
Salary
and/or
Social Security
Pension
Annuities
|
Non-qualified Sources:
Mutual Funds,
Stocks, Bonds, CDs,
Managed Money,
Real Estate,
Other
|
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Monthly Discretionary Expenses:
Savings
Entertainment,
Travel, Family,
Friends, Education,
Charity, Other
|
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Qualified Sources:
IRA, 401k, 403b,
SEP, Other
(Availabilty and Flexibility to Close the Gap?)
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Total Expenses:
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Guaranteed Income:
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Gap:
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- Consider developing your “Hope Chest” based on this analysis to help prepare for a career transition and guide the timing of a major move. Monies to cover what a future/different employer or industry practice may not cover, as well as investment dollars to segue into your new career (education/retraining). Consider how part time work may come into the picture or supplemental income from a side business.
- An accountant can be a great resource to understand the income tax mitigation opportunities for the job search and personal retraining process, including establishing 529 investment accounts for yourself, not just your children or grandchildren.
- As you approach retirement, estate planning is also important to address with your eyes wide open to protect your heirs’ best interests.
- As with your other mentors and sponsors, consider seriously adding a financial planner, accountant and lawyer to your personal Board of Directors.
Additional thoughts from Dr. Zara Larsen:
1. When contemplating or finding yourself in a career change, get anchored with the help of the “F’s of Transition” – Faith, Family, Friends, Fitness, Fun and last but not least, Finances and Frugality. Each is part of a foundation for flexibility and fulfillment, and freedom from anxiety.
2. Being very clear on your goals and objectives (career, financial and other) can keep you on the path forward, and sometimes more importantly, give you the voice to say “no” without apology or guilt to what could otherwise take you off course.
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