Financial Tips

Questions Financial Advisors Hear the Most

There are some questions that are asked frequently by clients. If our clients are asking them, it means that others are likely wondering the same thing. Here are the three most common questions asked on a daily basis.

How much should I be saving?

This is the number one universal question. No matter age, income, or financial stability, everyone who steps into the office asks this question. To answer this, we like to suggest the 50/30/20 budgeting rule. What this means is to simply divide your take-home pay into three categories to provide a framework for how that money should be allocated. With this model, half of your money goes toward “needs,” for example rent, utilities or insurance. Thirty percent is allocated toward discretionary spending such as vacation or going out to eat. The final 20 percent is what you should be saving.

In addition to how much to save, it is important to consider where that money is saved. It is important to have an emergency fund for an unexpected crisis such as health problems or the loss of a job. It’s vital to have between three to six months’ worth of expenses saved to cover you during this time. We also suggest investing in a retirement plan such as a company-sponsored 401(k). Don’t forget, if your salary increases, you should also increase how much you are contributing to your 401(k).

How much do I need to retire?

To determine how much is needed to retire, a good rule of thumb is to aim to have 75-80 percent of your current salary available annually in retirement. Once in retirement there is a need to shift from an earning mentality to the mindset that you are living on a fixed income and only have X amount of dollars to last the rest of your life. Rather than spend on frivolous items, the goal now is to make this money last. There are expenses that may increase in future years, such as healthcare or inflation, so it’s essential to be prepared in retirement. Create a financial plan with your advisor. This financial plan is a living, breathing document that adjusts as life changes, and helps ensure you are on track to meet your goals.

How do I create a budget?

It’s best to go back to the basics. Literally track ALL of your spending for a month so you can see with your own eyes how much you spend each month rather than assuming how much is being spent. We often have a sense of how much big expenses like the mortgage, insurance and car payment total each month, but smaller items like going out to eat, monthly subscriptions and online purchases can add up. When we have clients do this and physically write down their expenses on paper, they often come back and say they had no idea they were spending so much.

In this case, ignorance is not bliss. It is hard to achieve your financial goals without a budget and you can’t create an accurate budget if you are not aware of how much you are spending. After reviewing your spending habits, create a budget that builds in savings for long and short-term goals. For example, if cutting back on Starbucks over the course of a year means it’s possible to make a special purchase, skipping your latte may be worth it. Remember to review your budget and spending habits at least quarterly, to ensure you are on track or evaluate where to cut back.

These questions are so common because they truly affect everyone. While our answers here are fairly straightforward, everyone’s situation is unique. That is why talking to financial advisor can be helpful to navigate through these questions. To have a conversation contact us at 877-723-5571.


Securities and insurance products are offered through Univest Investments, Inc., member FINRA/SIPC and a licensed insurance agency. Investment advisory services are offered through Girard Partners, a Univest Wealth Management Firm. These affiliated companies are licensed subsidiaries of Univest Corporation of Pennsylvania. Products and services offered are not FDIC insured, are not a deposit of or bank guaranteed, and are subject to risks, including possible loss of any principal amount invested.

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