Central Illinois Business Magazine
FINANCIAL PLANNING          February 2013

Financial strategies for success


Curt Anderson

By Curt Anderson
CIB Contributor

As we venture into a new year, the prospect of developing and adhering to a financial strategy can sometimes be overwhelming. However, it doesn't have to be complicated. When organizing your finances and planning for the coming year, consider taking the following three steps:

• Measure your current financial status.

• Identify your financial goals.

• Identify the steps to help you get there.

Measuring your current financial status can best be accomplished by preparing a personal balance sheet.

Goal setting is critical in creating a successful financial plan, but few people actually set clearly defined goals. Funding a child's education, increasing current income, reducing taxes, achieving retirement security and passing accumulated wealth to their families at death are all popular primary financial objectives.

Set aside enough reserve funds to cover emergencies or temporary unemployment. By planning ahead for large expenditures, you can prevent anxiety and save on finance charges. Many financial planners suggest you have three months' salary available in savings for the unexpected. Then take a look at your spending needs over the next year or two. Once you've determined how much you need and when you'll need it, you're ready to identify the steps to get you there.

Here are four points to include in your financial strategy.

Consistent saving.

Using a payroll deduction or automatic savings program is often more successful than simply trying to save on a less frequent basis. Automatic saving plans are easy to set up, result in consistent deposits and are available in a number of forms. Select one that meets your long-term needs and fits your budget.

Wise investing.

Investments come with risks, and ideally higher returns to compensate for those risks. Asset allocation, diversification and investment costs should all be taken into account as part of a wise investment strategy. Understanding the risks of price fluctuation, loss and inflation are necessary when creating your financial plan.

Adequate protection.

Periodically, you should review all your insurance coverage. This includes homeowners/renters, health, auto, disability and any umbrella policies. For peace of mind, make sure you have the right combination of coverage and deductibles. If you use insurance primarily for "catastrophic" coverage, remember that higher deductibles usually translate into lower premiums.

For life insurance, first evaluate how much you really need. If your family would need significant funds to replace your income, a larger policy might make sense. If you are single, perhaps a smaller policy (and smaller premiums) would be a more cost-effective option. Also, compare the benefits and costs of term and whole life policies. For younger, healthy individuals without need for permanent protection, a term policy may be better.

Use a qualified adviser,

if you need one.

In areas where you need or want help, find the right adviser. It may be an investment professional or financial planner who can provide guidance. Make sure he or she is qualified and that you can comfortably work with him or her. Do your homework. The more knowledgeable you are, the better you will be able to evaluate recommendations.

When considering an adviser, review qualifications and experience such as education, number of clients and professional references. Find an adviser with a competitive edge such as a CFP, CFA and/or CTFA designation. With extremely stringent academic, continuing education and examination requirements, these designations are considered to be some of the most difficult and prestigious to obtain.

Remember, your decisions will affect you and your family for a long time. Implementing a financial plan now will reap benefits for years to come.

Curt Anderson is executive vice president and managing director of Busey Wealth Management.



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Editor's Note

Heading toward harvest

As I’m writing this, the corn is taller than me, the soybeans are lush and green, and one of the hot topics for farmers this summer is drones. In July, farmers attended a two-day Precision Aerial Ag Show in Decatur to learn how they could scout their fields with drones, identifying problem areas where drainage needs improving or where pests or weeds are causing damage.

Another hot topic — one that is not quite so fun — is Palmer amaranth. The invasive weed has developed a resistance to herbicides. Weed experts are trying to raise awareness among farmers, saying this is a threat that shouldn’t be taken lightly.

The University of Illinois has developed recommendations for managing Palmer amaranth. Read in this issue what experts are recommending to farmers.

Also in this issue, a UI food scientist discusses his perspective on labeling food containing genetically modified ingredients. If you are interested in learning more about other hot topics in agriculture, check out the UI’s Agronomy Day on Aug. 14. Learn more at http://aces.illinois.edu/calendar/agronomy-day-2014.

Jodi Heckel is editor of Central Illinois Business magazine. She can be reached at 217-351-5695 or jheckel@news-gazette.com.