By Patrick Amey

According to a recent study by Northwestern Mutual, 85 percent of American adults suffer from financial anxiety. Unexpected expenses cause the most concern, everyday costs are a close second, followed by the fear of not being able to retire.

While worrying about the future is a futile exercise, let’s tackle the three foundational financial practices at the core of these fears. Then maybe you can sleep a little easier on this All Hallow’s Eve:

Build an Emergency Fund

No one has a crystal ball to predict their financial future, it may give you a little peace of mind to establish some sort of cash reserve. Dave Ramsey is a big fan of the $1,000 emergency fund to get out of debt. I think that amount is a little lean, but his premise of having some type of reserve to keep us from turning to credit to finance the unexpected is spot on. We need to have a buffer when something goes wrong – a job loss, a roof replacement, the hot water heater goes out – they all have the same effect. They interrupt our monthly cash flow, so we need to come up with a quick solution.

An emergency fund allows us to finance life’s unexpected costs on our own terms. How much should you have in your emergency fund? I recommend at least three months of fixed expenses. Talk to your financial planner about what is reasonable for you, and make a plan to save toward that number.

Live Below Your Means

It sounds spookily simple but can be very difficult. If you can spend less than you make, routine expenses will likely not stress you out. A helpful tool is to establish a cash management system. First, set savings and retirement aside by automatically deducting from your paycheck into your accounts. Next, pay off debt (mortgage, car, student loans, etc.) before you pay for monthly expenses like utilities, groceries, etc. Next in line are periodic expenses (planned car repairs, holidays, home improvement) and last is lifestyle and entertainment.

The goal here is to keep this last bucket (lifestyle) consistent as your income goes up. Then you are truly saving more than you’re spending.

Create a long-term plan and take action

This isn’t about hitting some elusive retirement target figure. It means taking stock of what’s important to you, considering your assets, making a plan, and then tweaking that plan as necessary. First, what do you want to do when you retire? It may sound like an oxymoron, but does it include work (volunteering or an encore career)? Do you want to travel or relocate? The amount of money you will need in retirement depends on the lifestyle you want to lead.

Next, calculate your monthly cash flow – your income minus expenses – and remember to consider how your tax and healthcare expenses may change down the road. Do you have retirement income? Traditionally this has included some combination of Social Security benefits, personal savings, and a company pension plan. Today, pensions are rare and Social Security will likely change in the near future, which means your personal savings is more vital than ever.

We believe it’s important to clarify your goals, build a plan and take action. The crucial component is to continually monitor your plan and make changes as life happens. Take this opportunity to stop, look around, and see how you feel. Don’t be scared if you aren’t where you want to be. Instead, turn that fear into action now! Information is power, and a good scrubbing of your finances is a great way to give you the facts you need to make changes.

For help with your specific situation, contact Patrick Amey –, (913) 345-1881 or visit our website at We help successful people Master What’s Next®.

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