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8 Factors That Lead to Your Legacy

What does your unique financial legacy look like?

What does your unique financial legacy look like? Based on your age, maybe you’ve never even thought about the later years of your money life. Allow us to get you thinking about it, regardless of your life stage. The sooner, the better, as the old saying goes!

Yes, life insurance, investments, and an estate plan are crucial components of a long-term financial strategy, as you will typically hear and also read about below. Yet there are many other things you can do today to intentionally create a lasting impact on your money, your future, and the people you love.

1. Your Style

What kind of financial legacy is important to you? What do you want from your money over the course of your life? It’s different for everyone and could be many different things even for you.

  • If you value Comfort, you may wish to invest more in your environment; your home life.
  • If you crave Adventure, you may wish to travel more and use your money toward Bucket List activities.
  • If you want Security, you may wish to spend conservatively in all areas of your life and maximize savings and insurance planning.
  • If you desire Influence, you may wish to support charitable organizations that are important to you and leave sizeable gifts to family members.
  • When you are able to determine what’s most important to you, you create a guidepoint for your decision-making, moving forward.

2. Your Habits

Developing financial discipline in your daily life will help you in the long run. It’s never too early or too late to create a focus on and improve your money-related habits. Start by mastering these 3 basic behaviors:

Save more. When you pay yourself first, you enjoy the motivating benefit of compound interest, which accelerates the rate of your savings growth.

Budget and save for short-term needs such as emergencies, home repairs and vacations. Plan and invest for long-term needs such as education and retirement.

Avoid expensive overdraft fees and high interest rates on personal loans and credit cards - both can drain you of extra cash without you even realizing it.

3. Your Credit

How you handle debt determines your credit score and history, and it’s an overall rating you will carry with you throughout your financial life.

To manage any debt you currently have or take on, we recommend you maintain a chart of all your commitments including the creditors you owe, your minimum payments, your overall balances, and your interest rates. Then decide on a debt repayment strategy. Will you tackle the largest balance first? Or the one that carries the highest interest rate first, regardless of balance? These are two highly popular ways to pay off debt over time in addition to consolidation which combines multiple balances into one loan, often at lower interest rates and with more affordable payments.

Just remember – it does take time, often many years, to become debt-free – and that’s okay. If you manage it responsibly, your credit rating will reflect that.

4. Your Insurance

The main point of insurance is to protect you from financial setbacks. Managing your risk in regards to your auto, home, other personal possessions, debt, and your life itself are considerations when purchasing various types of insurance. Our best advice about insurance is to take the time to shop around and compare pricing before you buy, just as you would do for other major purchases, such as vehicles and furniture.

5. Your Philanthropy

Sharing your treasure might be something that’s important to you. If so, you will want to work charitable giving into your budget along with saving, bills, and debt payments. Over time and if you can afford it, you may want to gradually increase your annual donations. Ultimately, you can roll your favorite causes into your investments and estate plan, two more factors addressed in #6 and #7 below.

6. Your Investments

A professional financial advisor has the knowledge and experience to partner with you to design a lifelong plan for your assets. Diversifying your investments is key as is patient decision-making. Especially in a volatile market as we are facing today, decisions based on nerves can lead to costly mistakes. Stick to your plan and check in regularly with your advisor so you’ll know where you stand.

7. Your Estate

This term does not apply only to sprawling acreage or a palatial home. Your estate includes everything you own from property to cash and investments to personal belongings. Estate Planning is best done with a legal professional, who will help you draw up a will and/or a trust, based on your unique situation. You can also include wishes for your own funeral or celebration of life in a will, which can alleviate stress on your family members in the future.

8. Your Vault

You may not have a large physical safe or even a safe deposit box. But especially in a digital age, compiling a “life file” is an essential step in ensuring the legacy you’ve designed will be carried out. Research and determine the most secure way to list your accounts, investments, passwords, and contact information for the trusted advisors who handle your financial and legal affairs. Then, speak with your attorney or accountant about the best way to designate one or more trusted, organized, and responsible individuals to handle the data when needed.

This overview is only a glimpse of what it takes to create a legacy. May it set you on a path toward learning and speaking more about this vital financial topic with trusted professionals who specialize in these areas.

Did You Know? 64% of Gen X (ages 37-52) do not have a will.

In the United States, 800+ companies provide life insurance. It is important to do research before buying a policy.

Have questions? Our experts are here to support you. Contact Elements for support with all aspects of your financial journey.

This information is provided for informational purposes only. It does not constitute legal, tax or financial advice. Consult with your tax, legal or financial adviser before taking any action.

Sources: AARP / Insurance Information Institute

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