“Fun Car” Blog PostFacts and StatsArticle – What Do Rising Interest Rates Mean For Your Money?
When working with financial planning clients, one question that I regularly ask is, “If money wasn’t an issue, what things would you like to do in the future?” It’s always interesting to learn what people want to do with their money. Common responses are spending more time traveling, purchasing a second property to ultimately retire to, or to indulge in a fun hobby. This question allows people to dream without the idea of any monetary restrictions and can uncover things they have been thinking about, but maybe weren’t sure if they could afford to do or not.
About five years ago, I asked one of my clients who was single about to retire this question. She thought about it for a bit and told me that she wanted to buy a “fun car” once she retired. She said that she had previously owned a little sports car many years back, but had ultimately sold it and regretted that decision. She described the car in detail to me – it was a blue Nissan 350Z. She’s always been into cars and this car was sporty, fast and fun to drive!
This was an important piece of information that I learned for me to include in her financial plan. My financial planning software allows you to enter different types of spending goals into the software besides a person’s core retirement budget that covers one’s everyday ongoing expenses such as a mortgage payment, rent, insurance, utilities, food, clothing, cell bill, etc. We set a budget and a purchase date for her to buy a “fun car” and entered it into her financial plan.
She wasn’t sure if she would be able to afford it, but her financial planning results illustrated that she would be able to make this purchase without any financial issues. She’s also a bit conservative with her money, so I have been gently urging her to enjoy and spend her money that she’s worked so hard for and diligently saved during her working years. I have found that for many people, switching from the savings mindset during their working years over to a spending mindset once they retire can be difficult and it takes some time to adjust.
Just recently, this client left me a voicemail over the weekend to let me know that she finally purchased her “fun car”, a white Mazda Miata convertible. When I returned her phone call, she was so excited and told me all about the car. She couldn’t wait to pick it up and it sounds like she will be giving me a ride later this summer! Just hearing the excitement in her voice was so rewarding for me. It’s these moments that I truly enjoy and know that I made the right decision when choosing a second career as a financial planner.
13 – Number of states that mandate personal finance education for high school students before they graduate (Next Gen Personal Finance)
10,000 – Number of people turning 65 every day in the United States (US Dept. of Health & Human Services)
53.3% - Increase in the Labor Force Participation Rate (LFPR) for adults ages 65 & over since 2000. The current Labor Force Participation Rate for ages 65 & over is 19%. (advisorperspectives.com as of March 2022)
67% - Percent of Americans with no estate plan in place (caring.com)
4.8 Million – Number of Pickleball players last year in the U.S. - the fastest growing sport in America. (Sports & Fitness Industry Association)
If you pay attention to financial news, you are probably seeing a lot of discussion about inflation, which has reared its head in the U.S. economy after being mostly dormant for the last decade.
On March 16, 2022, the Federal Open Market Committee (FOMC) of the Federal Reserve raised the benchmark federal funds rate by .25% to .50%. This is the beginning of a series of increases that the FOMC expects to carry out over the next two years to combat high inflation. To learn more about how rising interest rates can impact your money, click here to read the article.
I hope you enjoyed the newsletter. Please email me at firstname.lastname@example.org with any questions you have regarding planning for your future.
Thank you! Cindy Turkington, CFP®, CDFA™
Mailing Address:855 Village Center Drive, #360 North Oaks, MN 55127
“The biggest adventure you can ever take is to live the life of your dreams.” - Oprah Winfrey media personality, businesswoman and philanthropist