Today, there are countless choices on where to save, invest, and spend your dollars.  Easy initial destinations on where monies go may include employer retirement accounts, stock purchase plans, or a deferred comp program.  These choices remain attractive out of convenience.  Thinking beyond what your employer offers, where’s the next best place to direct dollars?

There are 529 savings plans that offer a place to invest for future education needs.  After tax contributions to IRAs are a practical choice as is opening an investment account and selecting various securities.  Backdoor Roth IRAs are attractive places too regardless of your earned income.

Still another approach includes paying down debt, be it mortgage or other revolving credit.  One may also choose to overinflate their cash reserves by increasing their savings accounts.   Purchasing property or a business can be another avenue on where dollars are directed.

The right decision is rarely easy or straight forward.  It’s not about a particular destination or combination of choices when putting your dollars to work.  First, it should begin with purposely assigning a job description to your dollars before they move into action.  This is the foundation for a financial plan.

The plan itself should move beyond the paper it’s printed on or the screen that’s shared.  The plan is more about a conversation on what’s important to you, your desired timeline, and what resources are available as you get closer to your destination.  When you lead into conversations around your priorities, your possibilities become clearer.  What you realize as time passes is that the location of your dollars should be directly connected with what you want to accomplish.

Gaining clarity in the busyness of life can be difficult.  It’s much easier to put off planning conversations to a later date.  So much is happening now with kids returning to campus and updating the family calendar with a new fall schedule.  Setting time aside requires energy in addition to balancing the demands at the office or working from home.

It’s not surprising that planning gets pushed off.  When this happens, other definitions sneak in and show up influencing where your monies go.  This is when ideas narrow in around a single theme, accumulating more.  More is the default answer when you haven’t had a planning chat recently or provided purpose to your dollars.

More influences your behavior and commonly leads to paying attention to the wrong things.  Outputs, rates of return, and recent economic news often steal the stage.  All these things are out of your control and shouldn’t influence the actions of a patient investor.  Unfortunately, speculation and guessing what happens next is directly tied to accumulating more.

More sounds like a good answer, but it’s not the best choice.  Directing your dollars with purpose allows monies to support your plan.  A plan is flexible and evolving.  It helps by leaving room for error and opportunities so there’s less guessing and reacting.  One of the best features of talking through your plan is gaining an understanding of what enough means to you.  With enough quantified on your terms, you can turn your attention to other activities.  Family, friends, a work project, or simply enjoying a good book.

Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Flowerstone Financial are not affiliated.

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