How to simplify your life by outsourcing your finances
Finance 101
Life can be fast-paced and oftentimes extremely overwhelming. Sometimes, taking just one responsibility off your plate can make a world of a difference in managing everyday life. Cue a celebratory mention of all the professionals that simplify our lives – housecleaners, personal trainers, accountants, nannies, home chefs, landscapers, etc. They never fail to help take something off our dreaded list of endless to-dos.
Obviously, not everybody has their own personal chef or trainer (we’re not celebrities here) – but it is increasingly common for people to outsource at least one thing they would normally be individually responsible for. That brings me to my main point – the idea of outsourcing your finances.
Questions to Ask Yourself
Take a moment to think about how much time you spend managing your money. No, not spending it – actually managing it. Yes, maybe you pay your rent, your credit card bill, and your car payment every month. Maybe you even have created a monthly budget and track your daily spending with an app like Mint or Albert. But are you taking care of everything?
Are you reallocating and rebalancing your investments based on changes in the market? Are you monitoring interest rates and paying off your student loans in the most efficient way for your situation? Have you consolidated your 401(k) accounts so you don’t lose track of them? According to the bureau of labor, the average number of jobs held between age 18 and 48 is 11.7—so it’s likely you already have multiple employer retirement accounts sitting somewhere.1 What about making sure you’re prepared to retire at age 65 and travel the world like you’ve always dreamed?
Likely, you’re not spending enough time on these more complicated or longer-term financial matters. Finding that delicate balance of dealing with your finances and planning for long-term goals, while trying to juggle everything else life throws us, simply said: is not easy. But the truth is, you should be facing these challenges head on.
Here’s What’s Happening
Instead of saving, we’re busy living our lives in the moment and spending our money on other things (like our morning Starbucks). Research shows that two-thirds (66.2%) of working Millennials have saved nothing for retirement, and out of the minority who are saving, only 5% are saving adequately (experts suggest devoting 15% or more of your salary).2 Not saving means not having any money to spend on all the fun things you’re supposed to finally have time to do in retirement, or maybe having to put off your retirement plans indefinitely.
If that doesn’t make you think twice about getting your finances in order, maybe this will: A recent study by mobile-banking company, Varo-Money, found that “85 percent of American adults sometimes feel stressed out about money, and a full 30 percent feel stressed out about money constantly.” This stress is affecting the job performance of these adults, making them feel depressed and making approximately 25% of all adults physically ill.3 Why not start putting your coffee money where it matters, and towards something that is important today, will be important tomorrow, and will be even more important in the future.
There’s a Solution
Despite being aware of your financial responsibilities and how important they are, it’s possible you truly don’t have time to make them a priority. It’s also possible that you just don’t want to deal (and that’s ok too!). If you don’t want to let the stress of money get the best of you, I offer you a solution: Outsource your finances. Just as you hire someone to do your taxes or to do your laundry, you can hire someone to manage your money and look out for your financial well-being.
Act Now
One of the best parts of outsourcing your finances now? Enormous strides in the Financial Technology (FinTech) industry have led to an increasing number of robo-advisers (websites or apps that provide financial advice or investment management with minimal human interaction) on the market, which offer a low-cost digital alternative to traditional brick-and-mortar based financial advising services. The main deterrent for many seeking professional financial help is cost. On average, robo-advisers charge .25%-.50% annually on your assets under management (a traditional advisor usually costs 1% or more).4 Robo-advisers allow you to access your accounts at your fingertips 24/7, and some apps even have an educational aspect. They are a great option for anyone looking to outsource their finances, especially less-established and less-experienced investors who have hesitated to seek help in the past.
Bottom line: Whether it’s using automated investment apps, consulting a professional or building a comprehensive plan, now is a great time to consider options for outsourcing your finances. Take the initiative and be more responsible by having someone else be responsible for your financial situation—it’s that easy.
Sometimes we all need a little guidance. We can offer advice on any money matter.
Citations:
1 EdSurge: “How Many Times Will People Change Jobs? The Myth of the Endlessly-Job-Hopping Millennial” by Jeffrey R. Young, July 20, 2017 https://www.edsurge.com/news/2017-07-20-how-many-times-will-people-change-jobs-the-myth-of-the-endlessly-job-hopping-millennial
2 National Institute on Retirement Security: “New Research Finds 95 Percent of Millennials Not Saving Adequately For Retirement” February 27, 2018 https://www.nirsonline.org/2018/02/new-research-finds-95-percent-of-millennials-not-saving-adequately-for-retirement/
3 PRWeb: “Varo Money Helps Americans Improve Financial Health With High‑Yield Savings Accounts and SMS Alerts” by Varo Money, March 8, 2018 http://www.prweb.com/releases/2018/03/prweb15293756.html
4 Nerdwallet: “How Much Does a Financial Advisor Cost?” by Arielle O’Shea & Andrea Coombes, March 12, 2021 https://www.nerdwallet.com/blog/investing/how-much-does-a-financial-advisor-cost/
Please note: Financial advice should be tailored to individual circumstances and the content of this article should not be viewed as recommendations.
This article is not an endorsement of any particular product, service or organization; nor is it intended to provide financial, tax or legal advice. It is intended to promote awareness and is for educational purposes only. The specific applications and services noted are not necessarily endorsed by John Hancock or any of its affiliated businesses.
Advisory services offered through John Hancock Personal Financial Services, LLC, an SEC Registered Investment Adviser. Boston, MA 02116. 888-955-5432.
JHA B 6100:0418 542LLO-20181119-1