5 Financial Planning Tips for Roseville Residents
Living in Roseville, California, can be a wonderful experience. But with a relatively high cost of living compared with other parts of the country, you want to make sure that you take care of your financial planning and position yourself to enjoy your hard-earned income.
Regardless of your stage in life, a formalized process of financial planning can be a great way to set you and your family up for success. This means that beyond baseline steps like budgeting and saving, you may want to formulate a financial plan with a professional who can help you across multiple areas, such as retirement planning, asset allocation, and estate planning.
To get on the path for financial planning, consider implementing the following five tips:
1. Find Your “Why”
To start the planning process, you should be guided by your “why.” In other words, why are you building a financial plan?
The first thing that comes to your mind may be that you want to grow or safeguard your wealth. If you explore that thought some more, you can get specific. You might find that you want to grow your wealth to fund your children’s education, or you want to safeguard your wealth so you can enjoy the retirement you always dreamed of.
Your “why” might have multiple components, and this insight can enable you to build a financial plan that’s tailored to your goals.
2. Review the Types of Financial Advisors in Roseville
With your “why” in mind, you can explore how different types of financial advisors in Roseville can help you reach your goals. For example, say you’re looking for financial planning to cover multiple goals such as education funding and retirement planning. You might want to work with a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional who can integrate many areas of personal finance.
Moreover, you might choose a local financial planner. A Roseville-based advisor, for example, may have more knowledge of the area compared with financial professionals from a large national company who might not have their finger on the pulse of community issues that matter to you.
3. Keep Fees Low
With your “why” figured out and an understanding of the best financial advisors in the Roseville/Sacramento area for your needs, you can start diving into the details of financial planning. In doing so, you should aim to keep fees low, as high fees can eat away at your investment returns and savings.
On the surface, the difference between, say, a 2% and 3% annual fee for investing in a mutual fund might not seem like much. But when dealing with large balances in a retirement portfolio, these differences can add up to tens of thousands of dollars, if not more, over time. In particular, as fees reduce your portfolio balance, you can lose out on the power of compounding interest.
As such, when looking for financial planning support in Roseville, consider advisors that strive for low fees, tax efficiency, and fee transparency. This isn’t to say that the lowest-cost option will be your best choice, but you also don’t want your money eaten by fees, charges, commissions, and other expenses.
On that note, consider the different fee options among Roseville financial planning firms. With a fee-only advisor, for example, you can get a sense of exactly what you’ll be paying for, as the fees come directly from you in exchange for agreed-upon services. With a broker-dealer, you might face a variety of fees such as sales charges, or loads, which can cut into your returns.
4. Focus on Building Wealth for the Long Term
As you work toward meeting your “why,” you likely want to take a long-term approach. Don’t expect to start working with a financial advisor and suddenly double your portfolio. Instead, you can work with the financial planner to set reasonable targets based on your risk tolerance and goals, maximizing your potential to build wealth over time.
To that point, you’ll need to take a long-term approach to meet goals like saving enough to cover your children’s college tuition. Saving can take years, and you’ll need to stick with a plan that allows you to chip away a little at a time. Eventually, you can reach your goals, but if you let short-term interests overwhelm the planning process, you might not get there.
5. Take Taxes into Account
Lastly, consider the importance of tax planning in meeting your financial goals. With careful planning, you can get more out of your retirement portfolio or other savings buckets. For example, you might choose tax-advantaged accounts and carefully withdraw from them in a way that minimizes tax implications.
Working with a local, independent advisor can help in this regard, particularly because they might have a better understanding of area and state taxes than a financial advisor outside of the Sacramento region or outside of California entirely. An area financial planning firm can help account for expenses like local property taxes and state income taxes as you build out your spending, saving, and investing strategies.
By following these five tips, you can help set yourself on a better path toward reaching your financial goals. As an independent, fee-only financial planner in Roseville, Parkshore Wealth Management has been helping financially responsible individuals and families in the greater Sacramento area put these types of tips into action for over three decades.
If you want to learn how we may be able to help you reach your goals, please reach out to us to schedule a complimentary phone call.
This material was prepared by Kaleido Inc. from information derived from sources believed to be accurate. This information should not be construed as investment, tax or legal advice.
Parkshore Wealth Management is a family-owned, independent, fee-only Registered Investment Advisor serving the greater Sacramento area with an office in Roseville, CA. We partner with financially responsible individuals and families who are eager to take positive steps that will allow them to use their money to build the life they desire. The firm is led by Harold Anderson, CFP®, and Daniel Andersen, CFP®, both members of NAPFA, the country's leading professional association of fee-only financial advisors.