“Could-haves-should-haves” stories are especially painful when they could be easily avoided. Then the self-blame hits hard and sets in. As a tax and financial planner, it is my wish that everyone makes informed financial decisions that lead to their desired future. However, regret is all too common, especially in the case of health and wealth.
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Graphic: Fiscal and Financial Regret? 5 CPA tips to break the cycle
1. Improve your financial health
When it comes to health issues, we intuitively understand what we should do to prevent and correct problems – such as self-care and timely check-ups. To help us, our brain, finely tuned to our biological well-being, gives us bio-alerts like thirst or pain. We may not always be disciplined or proactive about health, but we generally know how to take care of ourselves. Therefore, medical regret is often expressed like this: I wish I had acted sooner. On the other hand, what will get us into trouble with money is not always clear. The complexity of financial life is growing rapidly and the rules are changing regularly.
Just investing in the universe of retirement savings accounts can seem as complex as a moon launch. Then earning that money for a lifetime can feel just as dangerous as landing safely back on earth. In addition, our complex and often nonsensical tax legislation is riddled with traps for the unwary. “It’s unfair” or “it doesn’t make sense” are words that accountants often hear. Unfortunately, for the missteps that people make, there are generally good alternatives—if only they’d known about it. Therefore, financial regret is often expressed like this: I wish I had known sooner.
Meet our CPA and tax expert: Jean-Luc Bourdon
Bio: Jean-Luc Bourdon, CPA, PFS, Wealth Advisor
2. Make informed decisions
In order to make informed decisions, we need to understand the pros and cons of the options available to us. In financial and tax matters, this is rarely obvious and often counterintuitive. Well-informed decisions shed light on the forks in the road. They replace guesswork with intention, trust, and peace of mind. Therefore, we cannot afford to ignore tax and financial planning. It’s not so much about money as it is about avoiding setbacks and safely pursuing our aspired future.
One of the saddest client meetings I have experienced was with a client who had ignored money issues her entire life. She always managed and found her lack of financial interest to be virtuous. But as her health declined and retirement threatened, she began exploring her financial planning options. Most of the time this was very late. Suddenly realizing how mindful financial choices in her life could have dramatically improved her current opportunities, the weight of that realization sank deep in her chair. Such heavy regret was heartbreaking to see.
3. Apply reliable information to your situation
Today there are more financial resources than ever before, both good and bad. In order to be able to make informed decisions, the problem is no longer access to information, but finding reliable information.
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The next challenge is applying reliable information to our personal circumstances. There always seem to be exceptions that make rules of thumb unreliable. However, for those who are committed to financial self-care, there are resources to make it happen.
In order to receive professional guidance, the financial planning industry offers a greater number of well-trained planners than ever before. Once a rarity, financial planners with a college degree in financial planning or a related field are now common. A wide range of fee arrangements is increasingly being offered, such as hourly fees.
4. Don’t forget: Tax and financial planning belong together
Taxes are always the most common element of financial planning. It’s like a parasite that feeds on all aspects of financial life. Consequently, many CPAs naturally develop financial planning expertise, sometimes adding the Personal Financial Specialist (PFS) credential reserved only for specialist CPAs. Similarly, many financial planners add tax planning expertise, generally with the Enrolled Agent (EA) credential.
5. Start tax and financial planning now
Here are 4 things you can do now:
- Commit to a regular financial maintenance routine to regularly review, review, and improve your financial well-being.
- Start with a financial review to determine the areas of your personal finances that you most want to improve. For example, think about taxes, estate planning, risk management, budgeting, debt management, and planning for long-term goals.
- Identify key financial resources you can rely on. Perhaps you want to build a professional advisory team, put together a financial library, or both.
- Ask yourself: what does greater financial well-being mean to you? what would it take What are the obstacles? How do you get there? What steps can you take now?
Regardless of the options you choose to make more informed tax and financial planning decisions, remember they will help you avoid regret. Most importantly, they empower you to make conscious choices about a desired future. The winds of financial empowerment are blowing constantly. Don’t ignore unfurling your sail.
Jean-Luc’s articles are not intended as tax, legal or financial advice to any specific person. They are just information. The ideas above may not be right for you.
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Editor’s note: The opinions expressed in this article are those of the authors. The content was rAudited for tax accuracy by a TurboTax CPA expert.
Zachary Faulds contributed to the writing of this article and produced the video and/or accompanying graphics.