Taking a big picture look at your finances during the pandemic.Continue reading
Welcome to Xena Financial Planning (Xena FP).
I am so very glad you are here! Allow me to introduce you to my new firm.
I honestly did not set out with the intention of creating my own practice. In 2014, when I first entered the industry, I was eager to learn from more seasoned planners and get as much experience as possible. Fast forward 6 years and I feel called and emboldened to offer a new kind of planning firm.
My focus is on women (and their partners) in the early to middle stages of their careers. Specifically, I absolutely love helping clients who receive equity compensation as part of their income. It’s extremely common in the tech world and while there are plenty of brilliant people working in tech, many of them do not have the time or inclination to manage the influx of stock. I also offer a unique perspective and advice for women who own small businesses, based on many years of working in finance for small businesses and start-ups.
Not only do I feel compelled to serve a more specific demographic, I can improve on the process, which is in dire need of a facelift. The world of financial planning is in the midst of a seismic shift; the way that advice is delivered is dramatically different from the way prior generations received it.
What I love about financial planning is the relationships and the process. I’m not overly focused on investment performance, nor do I plan to deliver a massive financial plan which might be better used as a doorstop. In my view, financial planning is a highly dynamic process, with many moving pieces that are constantly in flux. At Xena FP, I work with my clients on an ongoing basis, to help them navigate whatever life delivers. I strive to both educate and empower clients as we develop a collaborative relationship.
My desire to specialize, as well as build a process that works for our highly volatile world, led me to found Xena Financial Planning. Largely based on the fact that I founded the business in the midst of a global pandemic, my intention is to be 100% virtual. One of the things I have loved about the pandemic is not having to spend a lot of time in traffic; I am sure my clients can appreciate that! I’m so happy to have you here for some part of the journey. Together, we will build something extraordinary.
The conventional wisdom for an emergency reserve is about 3 to 6 months of living expenses, typically kept in a liquid, FDIC-insured account. So just how do you calculate “living expenses” and what exactly is “essential”?
In the current global pandemic environment, most of us have noticed a shift in our spending. Travel budget: $0, eating out: minimal. Your spending now is probably fairly representative of the minimum needed to survive. Things like your rent/mortgage, basic transportation expenses, food & utilities should absolutely be included. Now take that minimum monthly number and multiply it by 3. This is the smallest number you should target for an emergency reserve.
If anyone in your household is self-employed or has variable income (i.e. a real-estate agent, or an artist), you will want to target the higher end of the 3-6 month range. COVID and its effects have hit certain industries particularly hard. Even professional athletes are facing a significant cut to their expected income. Given the circumstances, it’s understandable to lean towards caution and keep as much as you can.
That’s a reasonable strategy for the short term, but don’t sacrifice saving for retirement or other goals in favor of sitting on oodles of cash.
On the flip side, if you’re just starting to save, these amounts may seem daunting. At the very least, aim to have a couple thousand dollars set aside in the event you have a major house repair or other unexpected expense. It won’t get you too far but it’s a great start. Plan to set aside a little bit from each paycheck until you reach the goal.
One of the benefits of working with a financial planner is that they can help you prioritize saving for an emergency reserve, paying down debt and saving for other short and long-term goals. All of the recommendations here are simply that.