Have a Spending Plan? Here’s Why You Should

In accordance with full disclosure, I’ll admit right away that a spending plan is another name for a budget – but with a more positive connotation.  (Kind of like referring to a diet as an eating plan.)  Although a spending plan is meant to achieve the same ends as a budget, it somehow doesn’t feel quite so restrictive.

I am frequently surprised when I begin working with clients who are setting up their first general financial plan or a retirement financial plan.  Too often, it seems, they find the idea of a budget – or spending plan – quite foreign to them.  And perhaps there is a historical explanation.

Do Upcoming General Elections Matter to Your Portfolio?

At this time of year, a good deal of attention naturally is paid to the upcoming mid-term elections.  We find articles and essays attempting to correlate what might happen to various investments depending on the outcome, especially in terms of congressional results.

A fair question is:  “Does it really matter to one’s portfolio?”

More States Looking Into Offering Retirement Plans

In recent years, legislatures at both the federal and state levels have continued to pay attention to what might be called “the retirement coverage gap,” meaning a large number of people in the United States are not financially prepared for their older years -- a situation that could cause future problems for the country as a whole.

In my last blog, I noted that many people do not have ready access to retirement savings options, such as those offered through most large employers, and the federal government is exploring ways to address the problem.   One possible solution is a bill that would permit multiple employer retirement plans (MEPs), which would enable small employers to join together to offer such plans.

Those Without Retirement Plans May Cause Future Problems for All

Congressional Action May Be Coming

Since these blogs are most often read by Thorley Wealth Management clients, one might suggest that addressing the need for retirement planning is “preaching to the choir.”


However, there is increasing concern that large numbers of people approaching usual retirement age are not financially prepared for their older years, a situation that could strain any variety of social services and affect the country as a whole.


A Proactive Aging Plan Can Avoid Future Problems

In this current series of blogs on whealth care planning, we’ve looked at why it’s vitally important to consider future health care possibilities in a good financial plan.  We’ve also reviewed two of the instruments we use to gather data to help us in this preparation – one focused on personal caretaking and the other a risk profile for cognitive failure.

The next step we call a proactive aging plan, and, again, we have a questionnaire that helps clients identify for us their preferences and attitudes as they age.  This would include many of their future lifestyle goals and objectives, but most certainly would address their attitudes toward health care.

A Risk Profile for WHealthCare Planning

Once clients have completed a questionnaire aimed at personal financial caretaking, the next step in the “WHealthCare” planning process is a questionnaire we refer to as a risk profile.


And, before I go any further, I want to emphasize that the questionnaires we use in the WHealthCcare process were jointly developed by financial advisors and medical professionals.

What’s the Process for WHealthCare Planning?

My last blog underscored the need for financially planning for clients’ possible future health care needs.  The next logical question is “what is the process for building a strong plan that takes into account health care factors?”

WHealthCare Planning

The letter “h” in the headline above is capitalized to assure readers that the made-up word “whealth” is not a typographical error. 

In fact, WhealthCare planning is a pretty good way to describe my next several blogs, which focus on the interrelationship – almost co-dependency -- between wealth management and health care planning.

Probability vs. Possibility – and How to Be Prepared

The consideration of risks leads us directly into the area of probabilities and possibilities. 

For example, we know that some risks have a small probability of actually happening.   However, those happenings could have a huge negative impact.  Given this – although the probability is low – we have to be insured against potentially devastating consequences.

The Role of Insurance in Risk Management

I address the role of insurance in a portfolio fully understanding that it’s not a favorite topic for investors.  Subjects like “saving for college” or “accumulating wealth for retirement” are seen as positives, while insurance is looked upon as something of a negative consideration.

But let’s take a closer look, because insurance is an essential part of risk management.  We know from experience that ignoring “what could go wrong” can have dire consequences, and insurance is designed to reduce or eliminate the negative impact of unfortunate circumstances.