Financial Planning

Getting Started with Your Financial Plan

December 10, 2020 By Jacki Liautaud

You’ve decided it’s time to start working with us. Here’s what Tree Fort Financial’s process typically looks like.

Getting Started with Tree Fort Financial

Congratulations! You’ve taken the first step in reaching out to an advisor to get help with your financial situation. Now, what should you expect? Below I’ve outlined some steps I typically go through with new clients as they start work with me. Of course, every individual situation is different, so your experience might vary from this.

Step 1: Introductory Conversation.

When someone reaches out to me, either through a personal email/phone call, referral from a client or business associate, or sends me a message through my website, I typically ask for a short, informal introductory conversation. I’d like to see if we may be a fit for working together. I believe this is part of my fiduciary responsibility towards my clients. I will be honest if I feel that I can’t help with an individual situation. This conversation typically takes 30 minutes or less, and during this time we decide whether we will proceed with working together.

Step 2: Data Collection.

The next step is data collection. I provide the client a list of documents I need in order to proceed. Sometimes it can take a week or more for the client to assemble the materials, which include any documents relevant to a client’s financial situation, including mortgage statements, bank and investment account statements, retirement plan and pension statements, life insurance details, student loan and credit card debt details, for example. If the client owns a business, there are a variety of business documents I will need. I provide a secure place to upload all the information, and the client completes this before we proceed to the next step.

Step 3: Financial Planning Kickoff Meeting.

Next, we schedule a meeting to discuss financial goals and dreams, future plans, and current situation (including a review of the documents the client uploaded). The meeting typically takes about 2 hours and can be conducted in person or virtually via Zoom/Google Meet. If the clients are a couple, both partners should attend the meeting because many times they each have differing perspectives about these subjects. I have a set of questions that I go through with clients, and I bring a “no judgement” attitude of curiosity to the meeting. Every situation is unique, and I’m not here to judge past choices, but rather to provide my professional expertise and some education about personal finances. More information about the financial planning process can be found here.

Step 4: Build the plan.

I take all the information I’ve gathered at the above meeting, and spend a significant amount of time (typically 3-4 weeks) building a customized financial plan that directly addresses the specific financial concerns, goals and situation of my client. The plan will include a full set of detailed next steps/tasks the client should take in order to get on track to accomplish their goals.

Step 5: Plan Presentation.

When a draft of the plan is complete, I schedule another meeting with the clients to review and discuss. Often there are decisions the clients need to make as a result of the plan, and plan modifications are typically needed. This meeting typically takes about 2 hours and often results in a really deep and productive conversation.

Step 6: Follow Up and Investment Account.

This step varies by client. Sometimes, additional changes are needed to the financial plan for various reasons. Sometimes, clients prefer a follow up meeting after a month, to check in with me and confirm they are on track with their tasks. If I will be managing the client’s investments, we begin the process of opening accounts at my custodian and set about transferring funds. More information about Tree Fort Financial’s investment management can be found here.

Step 7: Ongoing.

If the client chooses to have me manage their investment assets, they will receive regular communications regarding topics like asset allocation changes, my perspective on the markets or other financial matters, and performance reviews. Depending on the size of the client’s assets that I manage, clients may also receive a monthly newsletter.

If you have questions about this process or would like to learn more, reach out. I’d be happy to chat!

Let’s get started talking about your goals!

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Affording Higher Education

November 12, 2020 By Jacki Liautaud

College comes with a big bill – here are some tips on how to make it more affordable.

$1.6 Trillion Student Loan Debt

The Federal Reserve estimates that Americans held $1.6 trillion in student loan debt as of the second quarter 2020. According to the Investor Education Foundation, nearly 50% of Americans who have student loan debt regret not choosing a cheaper college.

A 4-year college education may cost over $150,000. According to the College Board (link opens in new tab), for the 2019-20 school year, average tuition and fees for a public 4-year out of state university was $26,820, and room and board cost $11,510.

How can I minimize out of pocket costs for college?

There may be actions you can take to minimize your out of pocket costs for college.

Begin saving now. If your student is still several years from college, consider contributing to a 529 plan. These plans are tax advantaged when used for college expenses. After tax contributions are made, but when withdrawn for educational purposes, the growth is tax-free. Take advantage of the time-value of money by starting to contribute when your child is young. Ask your financial advisor for additional details.
Check out this post on giving the gift of education.

For Older Children

Examine your family’s assets. Often, assets in the student’s name are expected to be depleted first towards college expenses. Regarding family assets, typically a parent’s primary home principal and retirement accounts are excluded from consideration.
Look into grants and scholarships which don’t need to be repaid. Many organizations offer special grants and scholarships that your student may qualify for. Ask the guidance counselor at your student’s high school for suggestions.
Complete the FAFSA or CCS financial aid request forms. These forms typically use tax returns from 2 years earlier. If your family’s situation has materially changed since then, you’ll need to complete additional paperwork from the school.
Get a job. Encourage your high schooler to get an after school job. By working on weekends and over holidays, they can save up money towards college, and learn valuable life skills in the process, including time management, responsibility, and hard work.

Discuss Expectations

Maybe most important, have a serious, realistic conversation with your student to discuss expectations with your student before they get their heart set on a school that’s unaffordable. Talk to your student about what your family may be able to contribute towards their college costs.

Many experts recommend only taking out as much in student loans as the student expects to earn in a year after they graduate. Others say future monthly payments should only consume 10% of after tax take home pay. For example, a graduate earning $50,000 might afford a monthly payment of $270, or college debt of about $26,000 at the current undergraduate federal student loan interest rate of 4.53%.

Either way, talk with your student about the cost of college, the implications of student loans, and what’s realistic given your family’s budget and situation.

Get an Associate’s Degree First

A two-year associate’s degree from a local community or junior college is typically significantly lower than the cost of a 4-year school. Students can transfer to a more prestigious 4-year school to complete their degree, while getting the prerequisites out of the way in a more affordable manner.

Consider the Trades

A 4-year college degree is not the best route for every person. Becoming a skilled tradesperson could be a great alternative for some. Mike Rowe, famous for his tv shows and podcasts, started the Mike Rowe Works Foundation (link opens in new tab) to give scholarships to people interested in getting educated in the trades. From their website: “We recognize that a good education doesn’t always require a four-year degree. That’s why we look for people who aren’t afraid to learn a useful skill and work their butts off.”

Let’s get started talking about your goals!

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Estate Planning for Everyone

November 5, 2020 By Jacki Liautaud

Photo by Glenn Carstens-Peters on Unsplash

Take some action steps to get your financial estate in order.

Estate Planning For All Ages

I’d like to offer a reminder to make sure your estate affairs are in order. In today’s environment, having your estate and financial matters organized can help if your or a loved one’s health were to be compromised. Estate planning isn’t just for older people!

When you think of estate planning, you might immediately think of a will and/or trust. These are typically the first documents to be prepared, and can help you decide how your assets will be distributed, not the state. Consult an estate planning attorney to get started. I can offer referrals for Chicago-area attorneys who do this work – use the Contact Us form to send me a message.

Beyond a will, here are some other considerations

In addition to a will, there are several other areas of estate planning to consider. Here are some of them:

Powers of attorney for health care and financial matters. These documents give authority to a loved one in the event that you are incapacitated. Often when drafting a will, attorneys will also provide these documents for you to complete and sign. Make sure yours are up to date and properly reflect your wishes. Contact an attorney for assistance.
Beneficiaries on retirement accounts. If you have a retirement account (such as an IRA, Roth IRA, 401k, 403b), you have the ability to select a beneficiary who inherits these assets directly. Check your accounts to be sure your beneficiary is identified. And, if you don’t have a Contingent beneficiary listed, consider adding those in the event that your primary beneficiary predeceases you.
Passwords. Store your usernames and passwords in a safe place and let your family know where they are. This includes the password to your smartphone, online photos, and social media accounts, in addition to your banking and other financial relationships.

I am not an attorney and this information is not intended as legal advice. Consult with an attorney for your specific situation.

Reach out for a financial affairs summary sheet

I have a summary sheet that outlines a variety of financial documents and other materials to collect and have on hand in a physical folder. These materials can help your loved ones know where to go for all the important financial matters. It takes some time to assemble the documentation, but it can be very beneficial in a time of need. Reach out via this website’s Contact Us page if you’d like a copy of the financial affairs summary sheet.

Let’s get started talking about your goals!

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The Post-Covid Future of Education

October 15, 2020 By Jacki Liautaud

Post-pandemic, what might college education look like and how much might it cost?

College Education in the Post-Covid World

As I write this, we are still in the throes of the Covid-19 pandemic, and it’s early in the school year. Many students of all ages remain at home doing remote learning. But there are also many college students across the country who have returned to campus.

Mounting Financial Pressure

Colleges and universities seem to be facing mounting financial pressure to open up campus, and keep their students on campus even if they are remote learning from their dorm rooms. It’s no wonder. According to the College Board (link opens in new tab), for the 2019-20 school year, average tuition and fees for a public 4-year out of state university was $26,820, and room and board cost $11,510. If school is in session for about 8 months, that’s a monthly cost of $4,791.

College Board also examines how much college expenses increase year over year. According to the same study, public 4-year out of state schools cost of attendance increased by 2.5% from the 2018-19 school year to the 2019-20 school year. In 2019, the average US inflation rate was 1.8% (link opens in new tab), meaning that college costs increased over 38% more than inflation, in just one year.

How can colleges continue having prices like this, if they are only offering remote learning? A major benefit of a college education cited can be considered the experience of living away from home while still in somewhat of a controlled environment – a chance to “practice” being an independent member of society away from your parents. Another major benefit of college is also the relationships students build with each other and mentorships with professors. How can relationships be built in a remote learning environment?

On top of these challenges, and with so many other critical societal and financial factors, fundraising has to be a challenge for many universities at this time. Schools that may have been hanging on before, are now even more impacted since their alumni may no longer be able to support the school with donations at their typical level.

Between a Rock and a Hard Place

So how is a university going to cope? Many schools are discontinuing less popular majors or eliminating whole departments. My alma mater, small liberal arts John Carroll University in Ohio, recently announced (link opens in new tab) the dissolution of the art history department to much student and alumni dismay. But if it’s a choice between eliminating a department or two, vs the whole school being closed, it’s understandable for administrators to choose the latter. But how many of these liberal arts majors can be eliminated before it negatively impacts the entire education offered at the school?

The Future of Higher Education

This New York Times article (link opens in new tab) is from May 2020, and predicts that just a handful of universities will remain after Covid-19 and the move to remote learning. A different perspective, here (link opens in new tab), written by a New York University professor outlines some of the financial impacts felt even by Harvard, but also identifies potential bright spots in remote learning. There are some fascinating and thought-provoking insights to consider, and only time will tell the true long-term outcome of the Covid-19 pandemic on higher education.

It’s too soon to tell, in my opinion, whether remote learning will spark a revolution in how a college education is offered, and the associated costs. But I believe it’s coming.

Let’s get started talking about your goals!

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Financial Mindfulness and Covid-19

October 8, 2020 By Jacki Liautaud

Covid-19 can teach us about mindfulness by helping align our lives with our values.

What Covid-19 can teach us about mindfulness

Mid-March, 2020. States across the country announced massive economic shutdowns in order to slow the spread of Covid-19. We ran to the store and bought up toilet paper and canned goods, then we hunkered down at home, yelled at our children to get back to “school” (the kitchen table), and wiped down every package from the grocery store with bleach.

In the months that have passed since then, so much about our world has changed. Everyone wonders when 2020 will ever end. It’s been 7 months that feels like an eternity. Many people have been tragically affected by the loss of life and health. My heart goes out to all who have been affected in these terrible ways.

In the midst of this tragedy, there are wonderfully beautiful things that have arisen, if we just take the time to look carefully and mindfully. Here are a few financial-oriented examples of people turning challenges into reasons to be grateful during these very difficult months:

During March/April, American’s savings rates (link opens in new tab) increased significantly due to the lockdown. Some of my clients used that savings to make significant payments to student loans, pay off credit cards, and accumulate rainy day funds.
My business owner clients have shown resourcefulness that reinforces my view that an entrepreneurial spirit is one of the backbones strengthening our American culture. They gave themselves pay cuts or paid themselves last. They offered work-from-home stipends to help their employees continue working, from home. They pivoted their business models and developed new ways of delivering their services – all over an incredibly short period of time. I asked some of my clients the question, What would it take for the pandemic to be the greatest thing that happened to your business? And many of them answered by making their businesses stronger and more profitable than ever. They figured out a need consumers had, and developed creative ways of meeting that need.
Some of my clients expressed a strong desire to give back, beyond anything they had previously articulated. They gave loved ones meaningful gifts. They gave their time and financial assistance to specific causes or charities. In recognition of their own blessings, they wanted to offer up to others that blessing. Personally, I’ve given money to several organizations and causes during this time, including local restaurants Go Fund Me pages, the Council for Economic Education (link opens in new tab) and Association of African American Financial Advisors (link opens in new tab).
Many people are changing their lives to align more with their values. My friend moved to rural Wisconsin for the space and outdoor recreation, after wanting to leave the city for years. Another family is moving to the south to be closer to her parents and sister. Still another family is making a retirement dream of living abroad their reality now while in their 40s. Personally, I spent almost 3 months this summer working from our family’s lake home where my son was cared for by my parents and played with cousins every day, building relationships that I hope will last a lifetime.
More people than ever seem to be concerned about being good stewards of their financial affairs. They have old employer retirement programs; they have recently inherited money; they have a job that remains stable despite all the year’s disruptions; they are starting a business after losing their job due to Covid-19. The uncertainty caused by Covid-19 has prompted these individuals to reach out to a financial advisor to talk about their personal situation. Now more than ever it seems important to get financial affairs in order. And more people reaching out means more families I might be able to help.

It can be easy to get down about so many things happening in the world right now – the world can feel like a scary place, filled with uncertainty and hate. But if we look a little closer and deeper, beyond social media and attention-getting headlines, we can see the good.

My America is made up of neighbors who rake each other’s leaves and hold the door when my arms are full of groceries; daughters who move across the country to be closer to their parents; grandparents who give up their free time to help their grandchildren with remote learning; and kind people everywhere. It just takes a bit of mindfulness to see it.

What has Covid-19 shown you about changes you might want to make in your life?

Let’s get started talking about your goals!

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