An Education In Financial Planning
Real quick: be sure to check out the audio version of this, too!
During the month of February, we are talking to educators.
The importance of educators in our children's lives can’t be understated. If you’re like me, you don't want your children’s teacher stressed out about money!
We’ll continue our foray into education with my fellow financial advisor, Briana Reish, CFP and the owner of a podcast and blog for teachers, One Million Apples.
She has a very specific niche in her financial planning practice--her clients are educators.
In today’s blog, we’ll find out why she chose educators as her specific client base and how she got into finance in the first place!
In the beginning, Breanna loved managing her own money, and she knew she wanted to help people.
Her experience explaining the basics of 401k to employees was due to working in Human Resources and helping her husband start his own business. This helped to clarify her direction.
It was between these things and her enjoyment in handling her own finances, that she realized she was good at creating money strategies. It was something that excited her. She decided to concentrate on financial planning in school and then took an internship in financial planning.
The next step was deciding what type of financial planning she wanted to work with.
She explained that when she started her business, she thought her clientele would be for females needing financial advice. Her vision was of women coming to the office in yoga pants, hanging out, and talking about money.
That’s not what happened!
Instead, it was educators walking through the door (and public employees). She was cleaning up financial messes and seeing that her clients had been overcharged.
That’s when she realized that educators were a group that needed help with financial planning and she stepped in to help!
Financial Planning For Educators
I asked Breanna to give us an inside peek at financial planning for educators.
The first hurdle is usually tackling student loan debt while starting a career that doesn’t pay a lot.
Breanna would like to see new teachers looking at student loan forgiveness. If you opt for a student loan forgiveness program, make sure that you document, document, document.
You’ll also need to make sure that you get your annual certification as proof that you made all the payments.
She said for the educators who choose to get a master’s degree, some of them will fund it themselves. Others look at their unions or districts to have some of the costs covered.
Then you have older educators who have 403b accounts that they started at the beginning of their career when things were product-oriented. Back then it was annuity heavy (called a TSA).
Breanna said at the present time there are so many options for educators (especially in California).
She also said that while educators have very similar financial planning dilemmas as the general population when it comes to retirement options, savings options or the availability of getting solid advice, educators are in a whole different class.
For example, when you have a 401k--it’s the only choice. However, a teacher will have 15 to 20 options for 403b savings accounts.
Let’s look at some other differences:
Understanding employee benefits
Knowing what to look for when considering your benefit choices
How to budget when you get paid 10 times per year? Or 12 times per year?
A fee-only financial planner who specializes in financial planning for educators can make a huge difference in your future wealth!
Financial Planning Systems
What is Breanna’s financial planning advice?
Start with a plan.
She said there are too many times when people start out choosing products and life insurance before having a framework or building a plan.
The rule of thumb is first the plan--then fill it in with the solutions.
In fact, Breanna is frustrated because there are so many options for 403b in California.
Although they are very convenient, they also happen to have the most expensive fees.
She explains the tip-off is the “free lunch.” (Remember that saying: There’s no such thing as a free lunch). They’ll sign you up, continually make money, and disappear.
They never show up to advise you or help you with financial planning. In fact, they sell it as a solution--when it’s not. She explains the there may be a better solution that costs less.
Breanna states that there is one thing that she wants you to know: it’s that you don’t need someone to help you open up a 403b.
What if you need help?
She said to find someone who isn't attached to that account to help you.
What is your experience with student loan forgiveness? Signing up with 403b or creating a financial planning system?
Let us know!
Leave a comment below.