In honor of Financial Literacy Month, Amy Manning of DHG Wealth Advisors joins us to share a few tips on financial well-being. Amy is a certified financial advisor and helps create financial security for her clients through a disciplined approach with financial planning. Be sure to have a pen and a piece of paper handy to jot down notes during this podcast!
Episode 35 Transcript
AGH: Hello everyone and welcome back to another episode of our DHG podcast series. I’m Alice Grey Harrison, your host, and I love this venue because we get to hear about the things that matter the most: flexibility, careers and of course, our people. In honor of Financial Literacy Month, Amy Manning of DHG Wealth Advisers is joining us to give us a few tips. I’m sure that we’re hitting the midpoint of our New Year’s resolutions and we all could use some tips. Amy’s a certified financial adviser and she helps create financial security for her clients through a disciplined approach with financial planning. There were two major words in this sentence; discipline and planning. I think I might have a lot to learn here! Amy, tell us about what you do with DHG Wealth Advisers and how you got into this field?
AM: Absolutely. What I do here is I help clients manage their investments, which is pretty straight forward. You know, we build portfolios for our clients and manage that for them but really the biggest piece of what we do is financial planning and so that involves helping clients identify what their financial priorities are. That looks different for everyone, you know? It could be buying their first home, it could be saving to send their kids to college or planning to retire early or making a gift to their kids or grand kids. It really runs across a spectrum but our job is to help them figure out what that is and to help get them to their goals.
AM: I first wanted to get into the industry because, I’ll be honest, I’m a little bit of a math nerd and I’ve always had a love for numbers. Even back in college, I knew I wanted to do something in finance but I knew I didn’t want to be crunching numbers all day in front of a computer screen, so I wanted to do something that would also involve relationships. So that’s kind of how I got into wealth management and really the part I love is educating people. Because no one really takes a personal finance class in high school or college, and you’re left to figure it out on your own, or maybe your parents, or trial and error. That’s really the part I enjoy is taking difficult concepts and making them easy to understand for my clients.
AGH: That’s terrific, yeah. They definitely don’t teach that in school. When I graduated from college, I remember going to dinner with my cousin and I can’t remember what the number was but it was something like, this was in 1998. I told her that I felt like I could live in Washington DC, making $12,000 a year.
AM: Wow, that would be very impressive.
AGH: That would be very impressive. So I think my rent at that point exceeded just that number. So I had no clue. You probably see a lot of people make mistakes because of that, especially among young professionals like me when I graduated from college thinking I could live off of $12,000 a year. What are a couple of the biggest mistakes that you see when it comes to financial planning and wellness?
AM: Absolutely. Probably the biggest mistake I see is people not taking advantage of access to a 401(k) early in their career. Believe it or not, over 50% of individuals between the ages of 25 and 34 don’t have any money in their retirement account, which is crazy. You know, when you talk about investing, the beauty of compound interest really works the hardest for you in those first 10 years you know? In your 20’s and 30’s. So for people to not be taking advantage of that, they really need to kind of reevaluate where they’re saving if they’re saving and really start doing that and taking it more seriously. The second mistake I really see is people over extending themselves financially by taking on too much debt. I actually read a survey recently from Nerd Wallet that was doing a survey of all the debt owned by Americans and believe it or not, the average American household has about $50,000 in student loans, which I think we’re all aware of, $17,000 in credit card debt and $30,000 in car loans. That’s not even including a mortgage or how much you have to pay for rent, and so what happens is that when so much of your cash flow is already committed to paying off all of this monthly debt payments, it doesn’t give you much wiggle room to pay the bills let alone have some additional savings.
AGH: Wow, that’s very frightening when I think about it because you're talking about the average American, which means that half are a lot worse than that.
AGH: To have you here, what are five tips or six tips, that you could provide to us on establishing financial well-being early in your career?
AM: Sure. The key to all of these is discipline, right? Just like anything in life, if you’re trying to achieve some sort of goal, whether it be a professional goal or a health goal or a financial goal, it takes discipline and so that’s really the key to everything. But the first thing I would say is, you know, kind of back to the 401(k) thing, start saving as soon as you’re eligible. Even if it doesn’t feel like you can save much, even if it’s $50 a month or $100 a month, just start with something to establish the habit and then have a longer term goal of saving 10 to 15% of your income in your 401(k).
AGH: That’s terrific.
AM: Yes, so that’s a biggie that we see a lot of people not doing and then another thing would be having a budget, right? You wouldn’t believe the people we deal with, average income or very high incomes that don’t have a budget and they have no concept of what it costs them to live on a monthly basis. So if you don’t know where your money is going, you have no idea how much of that you can even save. If you can learn to have a plan for your money and have control over it then it won’t control you. One of the common things I hear from people of why they don’t have a budget is, “Well, you know, I just had to pay all the bills and then whatever’s left over, I’ll save that,” and what ends up happening is nothing’s left over because you're just taking things as they come.
AGH: That’s right. I think I’ve seen that before in my life and my husband will tell you that I would be guilty of it now if he wasn’t around.
AM: It’s a challenge.
AGH: Yeah. One thing that you mentioned to me when we talked before this was about spending more than you make, can you talk about that tip?
AM: Yes, so that seems like a no brainer. You know hey, your expenses should be less than your income but believe it or not, you know, when we talk about credit card numbers, that’s coming from people who are spending more than they make, right? Sometimes it’s so easy to, “Hey, I want to go on vacation, I’m just going to put this on my credit card.” Or, “Hey, I had an unexpected expense I don’t have the cash for it, I’m just going to put it on my credit card.” If you don’t pay those things off right away, they can really start to rack up and then you have something else happen in life that prevents you from paying that off, That’s just kind of a good rule of thumb is, “Hey look, unless you know you can pay off your credit card like in one or two months, you really shouldn’t be putting more than that on there.”
AGH: Very good. What’s your next tip?
AM: I have two more, next would be — and this really goes hand in hand with number three, which is not spending more than you make. But if you have an emergency fund, if you have three to nine months of cash savings set aside, then hey, you’re not going to have to put things on a credit card when unexpected expenses come up. That’s just a really good rule of thumb. Honestly, as soon as you get out on your own, really start trying to save, just start with three months right? Whatever cost you to live per month, squirrel away a few months of extra cash and then when something does happen, you don’t have to dip into a credit card or whatever. So that’s a biggie and can be really helpful for people, especially after they’re buying their first home, you know, you never know when something’s going to break or something’s going to go wrong and so having that emergency fund is really helpful for those unexpected expenses. Then lastly, I want you to try to pay down debts before they are due. Most people, they just pay what they owe, right? Pay whatever my monthly car payment is, pay whatever my mortgage is and that’s it. But you’d be amazed if you can put an extra $100 or a couple of hundred dollars a month toward these things. It can save you thousands of dollars of interest over time. That’s one thing I encourage my clients to do is to, “Hey, even though this is all it says you have to pay, let’s go a little bit above and beyond and really try to knock that out sooner.”
AGH: Wow, that’s a really great tip. I wish that I had had those when I was 25. For our listeners out there, if this their interest, where can they go to learn more about financial literacy?
AM: Sure, So there’s a ton of resources out there, especially with everything on the internet. We typically try to steer people away from the financial media. A lot of times they’re just generating hype and you know, the sky is falling sort of thing so we encourage clients to stay away from that. But there are some great resources just for budgeting, planning, savings like that. For employees of DHG, we actually have a lot of great resources on the Vanguard website and there are videos, lessons, articles, financial calculators, you name it. A lot of people just don’t know that that’s out there, so whenever you log on, all you have to do is go under education and you can see all those resources right there. That can be really helpful for employees. But if you had a website today, I go to a lot, talking about budgeting, I don’t know if you’ve heard of Mint before or Personal Capital.
AM: Those are fantastic websites for you know, keeping track of what all your account balances are and all your transactions and helping you stay on a budget. In fact, you know, my personal weakness is I could go over to the mall over here and drop some money pretty quickly and so, one thing I have setup for myself on Mint is, I have a budget for myself for clothing and it will give me a text alert if I’m getting close to that for the month and then I know hey, I need to stay at home. That’s really helpful.
AGH: I need that, will you sit down and get that arranged for me?
AM: Yes, I’ll come right to you, we’ll do it.
AGH: Wow, that’s awesome.
AM: Yeah, we’ve had several clients use that and had some success with that and then a few others, the AICPA actually has a great website called feedthepig.org. AGH: Yeah.
AM: Which has all sorts of education and planning resources, a lot of people like to play around with financial calculators, there’s some of those on there. I also go to bankrate.com for some financial calculators. Then lastly, it’s kind of know when to ask for help, right? That’s why people work with financial planners and financial advisers is because they’re in over their head and they’ve maybe accumulated a good amount of money and they don’t want to risk losing it. So that’s when they seek out a financial adviser and ask for help and start to do some planning.
AGH: Wow, those are some great resources and I’m serious, I might come sit down with you and learn about how to get some of these budgets set for myself. It sounds very helpful.
AM: Definitely, we’d love to help.
AGH: Well, thank you for being here with us, we really appreciate it.
AGH: And I thank you all for listening to Life at DHG, our premier podcast series. Be sure to check out our DHG blog for more great stories about our Life Beyond Numbers. Join us next time for another addition of life at DHG.
Amy joined DHG Wealth Advisors in 2008. She graduated magna cum laude from Liberty University with a degree in Business Finance, and she also holds her Certified Financial Planner™ designation. Amy helps create financial security for her clients by taking a comprehensive and disciplined approach to investment management and financial planning. Born and raised in High Point, NC, she now calls Concord home and works with clients in Charlotte.