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A Helpful Guide to Making Confident Financial Decisions

By Jeffrey Bangerter

We believe financial success is all about finding balance. It’s important to make suitable decisions and save for the future. However, you still need to enjoy the present moment and live a life that makes you happy. 

While this is an ongoing challenge, a few key lifestyle choices can make a big difference. Making good choices when it comes to your home, vehicles, and vacations can help you enjoy today while still building a solid foundation for your future. Here's a closer look at these important topics.

Choosing the Right Mortgage

If you’re like most families, your mortgage is one of the largest liabilities you’ll have. Before purchasing a home, you’ll need to decide on the term of your mortgage, typically 15-years or 30-years. While many buyers choose a 30-year term due to the lower monthly payments it offers, this isn’t always the smartest decision.

Most 30-year mortgages have higher interest rates when compared to 15-year mortgages. It's also important to remember you'll be paying that rate for an additional 15 years. If you can afford it, you'll often find that it makes more sense to choose a shorter-term mortgage. Not only will this save you interest, but when the mortgage is paid off, you'll be able to allocate the money you were spending to your savings or investment account. 

Smart Downsizing Decisions

Buying a home will likely be one of the biggest financial transactions you ever make. However, since a home is so much more than just a place to live, the decision isn’t purely financial.

It’s important to carefully consider where you want to live and how large of a home you need. While you’re younger and raising a family, you may need a larger home that’s conveniently located near work and school. However, as we age, our priorities often change. You may decide being close to family is more important. You may also find that maintaining your current home is becoming a hassle.

Downsizing at the right time and reallocating the money you were spending on a home to investments instead can have a major impact on your financial future.

For example, assume you’re 55, have $300,000 of equity in your home, and want to downsize. You could purchase a $250,000 home and allocate the $50,000 you were previously spending on your mortgage payments to your investment account. Assuming even a moderate hypothetical growth rate in your investment account, you could have the potential to grow your nest egg to a significant amount over time, all while enjoying living in a smaller home that's much easier to care for. 

Vehicle Purchases

Some financial experts suggest setting a limit of 15% of your net income to allocate towards your vehicle. However, just because you can afford something doesn’t mean it’s always the smartest decision.

For example, if you’re considering two different cars with a price difference of $18,000, choosing the less expensive vehicle will allow you to invest the difference. This will help to position you for future success.

Vacation Spending

Taking time to travel and enjoy vacations is important for your mental health. However, many Americans end up going into debt to fund extravagant vacations. You can strike a balance by making small adjustments to the way you travel. By cutting the cost of each vacation, you'll be able to enjoy your time away while also beefing up your future savings.

Consider saving money by traveling off-season and/or on the weekends, using discount websites to find deals, or trading expensive hotel rooms for private rentals. When you’re able to lower the cost of your vacation, consider investing the difference. You'll be surprised by how quickly it starts to add up.

Finding Financial Balance

As you can see, it’s entirely possible to enjoy the kind of life you want to live while also saving and investing in your future. To learn even more helpful balancing strategies, download our FREE whitepaper "The Great Spending Balance," today! 

The advisors at Bangerter Financial are here to help you weigh the impact of your decisions. To schedule a free consultation, reach out to us at 916-965-1879.



This is for informational purposes only, does not constitute as individual investment advice, and should not be relied upon as tax or legal advice. Investments in securities involve a high degree of risk and should only be considered by investors who can withstand the loss of their investment. Prospective investors should carefully review the “Risk Factors” section of any prospectus, private placement memorandum or offering circular. Please consult the appropriate professional regarding your individual circumstance. Investment advisory services offered through Bangerter Financial Services, Inc. A state Registered Investment Advisor. Registered Representative and securities offered through Concorde Investment Services, Inc. (CIS), member FINRA/SIPC. Bangerter Financial Services, Inc. is independent of CIS.

Topics: Retirement Financial Planning Financial Advisor Tax Planning Retirement Planning