Chris Conover is a seasoned financial services professional with twenty-five years of experience and the founder, president, and chief investment officer of Hudson Valley Wealth Management, established in 2008. A Fordham University MBA, he previously held roles at International Assets Advisory Corp., Guardian Life Insurance, and Van Eck Global, where he helped support significant asset growth. His advisory work spans individual portfolios, corporate retirement plans, and family trusts, representing more than $100 million in assets under management. He also performs due diligence on proposed client investments in areas such as startups and property markets and maintains active interests in digital currency, artificial intelligence, and commodities. Grounded in this background, Chris Conover presents a straightforward overview of core habits that help households get organized, set goals, and align saving and investing decisions. The following article outlines essential steps Americans can use to begin a basic financial plan.
A Few Tips for Basic Financial Planning
Financial planning represents a critical aspect of life in America, yet about half of Americans have not formalized a financial plan. Similarly, 40 percent of Americans have no retirement savings, while many Americans lack three months of expenses in savings or have no emergency savings at all. While financial planning can feel overwhelming, especially to start, Americans can ask themselves and financial planners a few basic questions.
To begin, individuals and households should know, to the exact dollar, how much money they spend and save each month. Whether a person is saving for college, a new home, or retirement, or simply growing their assets, saving a little each month is better than saving nothing at all. As a rule of thumb, Americans should try to save between 10 and 20 percent of their monthly paychecks.
Accounting for monthly expenses varies considerably from one household to the next. That said, Americans should try to avoid living in a rent-burdened household. According to the Census Bureau, about half of American renters qualify as cost-burdened, meaning they spend at least 30 percent of their monthly income on rent and related living expenses. According to the National Equity Atlas, about 25 percent of renters qualify as severely cost-burdened, which translates to 50 percent or more of monthly expenses going to living costs. Cost-burdened households struggle to set aside savings for future purchases or emergencies.
Next, individuals should understand their net worth. A person can calculate their net worth by assessing the value of their assets minus their liabilities, including all outgoing expenses and debts. Net worth represents only a broad overview of a person’s financial wellness, but it provides two key pieces of information. First, it can help individuals understand how many different types of assets they have. Second, it can provide insight into spending trends that negatively impact a person’s financial wellness.
While all Americans should plan for emergency expenses, such as medical costs or damage to a home or vehicle, financial planning should also be about working toward a better future. To this end, individuals and families should establish a few key goals. As mentioned, these goals might involve sending multiple children to college, purchasing a home, or traveling the world while in retirement. A person’s life goals heavily impact how much they need to save and what kind of investments they need to make to achieve those goals.
Retirement represents one of the most significant elements of a person’s financial plan. Individuals must understand what 401(k) plans they have access to via their employer and whether those savings can fund the type of retirement they desire. If possible, individuals should set aside between 10 and 15 percent of pre-tax income specifically for retirement. In retirement, a person should aim for between 70 and 80 percent of their pre-retirement income, though these figures can vary drastically depending on several factors. Individuals concerned about retirement planning should discuss their goals with a financial planner specializing in retirement savings.
Finally, Americans must have a clear understanding of their various insurance policies. For example, what type of financial support is available if one or both heads of household become incapacitated and cannot work for extended periods? Individuals should know what kind of life insurance policy they have and ensure that their estate plan is up to date and legally viable.
Additional financial planning topics to consider include how effectively a person is borrowing money, how to reduce income taxes, and how to optimize asset allocation.
About Chris Conover
Chris Conover is the founder, president, and chief investment officer of Hudson Valley Wealth Management, an independent registered investment advisory established in 2008. He previously served with International Assets Advisory Corp., Guardian Life Insurance, and Van Eck Global, contributing to major asset growth initiatives. A graduate of Fordham University with an MBA, he advises high-net-worth individuals and families, corporate retirement plans, and family trusts, representing more than $100 million in assets under management. His interests include digital currency, artificial intelligence, and commodities.
