Saving & Investing
Planning your finances: How to get started
September 19, 2013
Rebecca Katz: So our first question here is from Colette in Los Angeles, California. Thanks, Colette. She says, "What is the single most important step a person can take to achieve their goals?" I'm going to go to Mary for this one.
Mary Ryan: Well, thank you. Colette, that's a really wonderful question to kick us off tonight because I think that's the biggest thing that we look at is, "What do I need to do?" At this point, we're going to get into a lot of the nitty-gritty, I think, of how to do and what to do for financial planning and setting goals.
The single most important thing I really think is getting started. It's setting that goal and really looking at it and figuring out how am I going to get there? We all talk about retiring. We all talk about maybe sending our kids to college and things like that. But that's always something we put out there. We don't necessarily follow through to do it.
We always say, "Someday, I'm going to sit down and do my goals." But someday isn't a day of the week and we know that. We really got to put down and figure out what we want to do. I know that we all have our views on that. Do you have any thoughts?
Earl Harley: In all of my client discussions, everybody thinks they have a plan, but very few people have actually put pen to paper about it, and it's kind of like driving a car. You can jump in the seat and go somewhere, but you're not going to get to your destination until you actually have that.—you've got to know where you want to go before you can even think about trying to get there. And trying to actually quantify that—I think that's the really biggest hurdle people ever get to, and if they don't, they're really kind of just floundering around sometimes.
Rebecca Katz: Anthony asks, "What are the basics that successful people do correctly to achieve their financial goals?" So Chuck, why don't you take that.
Chuck Riley: Sure. I think that getting started is the first thing in coming up with a plan and actually putting pen to paper and actually sitting down. And I think being intentional is very critical too. You're actually thinking about the things you're trying to achieve and then putting them down on some kind of document and spending some time, and if you have a spouse, kind of talking through those things with her.
When I talk to Vanguard clients all the time, I'm always amazed at—I'm not surprised by that poll result because I think Vanguard shareholders are very in-tune with what's going on financially. One of the reasons that they love coming here is because they're—and we're focused on low-cost and things like that.
I think that setting a budget, actually keeping track of your spending, knowing what's going on, how much is coming in, paying attention to how much you're saving in taxes, coming up with plans and strategies to be able to get started I think is key.
Earl Harley: I think also, with all of us, when we have clients—the first thing that happens when they come to the door, we make them fill out, whether it's electronically or in paper, some sort of questionnaire, and the questionnaire is almost as useful for us as it is for them, so they can start to visualize what's going on, what they have. They can take a look at what assets are at their disposal, whether it's just a 401(k) plan, or they've got another savings plan somewhere else, or a 529 plan. Who knows what the area is? Then we can work with that and get an idea of what their cash flow's looking like and where is your money going, where's it coming from and where's it going?
And that's the foundation for us to work with from there. Then we can fine-tune things, but we have to know—and again, it's just as important for us as them because oftentimes, our clients haven't really given a lot of consideration to that level of detail.
All investing is subject to risk, including the possible loss of the money you invest.
Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.
Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor.
This webcast is for educational purposes only. We recommend that you consult a tax or financial advisor about your individual situation.
Vanguard experts emphasize putting pen to paper
There's no step like the first step and setting financial goals is no exception. Mary Ryan and Earl Harley of Vanguard Asset Management Services™, along with Chuck Riley of Vanguard Advice Services, explain why it’s important to put pen to paper and why "someday" isn’t a day of the week.
Other excerpts from this webcast:
- Include your spouse when making financial decisions
- Creating your personal budget
- Words of wisdom from Vanguard financial planners
- All investing is subject to risk, including the possible loss of the money you invest.
- Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency.
- Advice services provided by Vanguard Advisers, Inc., a registered investment advisor.
- This webcast is for educational purposes only. We suggest you consult a financial or tax advisor about your individual situation.
© 2013 The Vanguard Group, Inc. All rights reserved.