Don’t Wait for Those Storm Clouds to Appear to Start Saving for a Rainy Day

This is the time of year when many folks are in flux. The Holidays, Valentines Day, and even Easter is in our rear-view mirror(s), which means there are fewer gift-giving situations that are occupying our money and resources. Since Tax Season is upon us, many are revealing that their financial situations are better right now than they have ever been in years’ past. According to Stephen Iaconis, Managing Director and Wealth Advisor of Level Four Wealth Management, the number of two-income households are growing steadily, which means that more people are working and bringing home the bacon—then quickly burning that bacon to a crisp.

“With more families firing on all eight cylinders financially, we’re seeing people get pretty loose with their pocketbooks right now,” says Iaconis. While the temptation to spend may be attempting to burn that hole in your pocket, now is the time to harness your financial future for the long term. After all, you have substantially more spending power than ever before. Exercise it with caution. As in, choose not to blow it all.

The problem with an economy that heals and has been getting better each year post Great Recession, according to Iaconis, is that it can wreak havoc on the state of things for the consumer. “Realistically, take for example purchasing a car. Now is quite possibly a terrible time to buy a car (unless your circumstances require it) yet that’s a lot of people’s first instincts when they have extra money,” he says. You may have heard that brand spankin’ new cars are a bad investment—but what exactly do people even mean when they say that? They’re so shiny, that new car smell is intoxicating, and the gadgets on the latest models are cooler than ever before (Lane assist! Back-up cams! Heated and cooled seats!). What could be wrong?

The depreciation rate, for starters. A new car loses 19% of its value in the first year and about 11% as soon as you drive it off the lot. “So that extra money folks may have right now, is being vaporized by depreciation, first and foremost—the fact that it’s something likely to be worth less than what you paid for it,” says Iaconis. As glaring a problem as the depreciation rate is, however, Iaconis also stresses that those bells and whistles involved in a new ride are positioned to row directly against your wealth creation. He notes that many new car payments are almost always higher than the range you told the salesperson your range was—which is often more than the average household grocery budget. “Then, when you fail to compute the interest you pay on top of the cost of the car, you’re talking a significant chunk of what you work hard to take home every month. You have to be aware of the appropriate value of things,” Iaconis says.

Not that you can never find the right vehicle for the right dollar amount. “The problem is that you’re going to be told that if you don’t buy this car right now, someone else is lined up just waiting to seize the opportunity. Let them!” stresses Iaconis. As a consumer, it is so important to do your homework. You have to exercise patience and self-control here. It can take months to find the right vehicle with the right metrics, but it’s worth the time and effort.”

This car purchase is only one example of the importance of not allowing money slip through your hands that you may not be used to having.  This goes far beyond simply making wise purchases, though. In his role at Level Four Wealth Management, Iaconis makes it a point to help people to understand that there will be years when you aren’t working down the road and that those years are going to require money to facilitate the lifestyle you’re used to enjoying.

“If you’re going to live from the time you retire—say it’s your mid-sixties—to your mid-nineties [as many people do], you’re going to need money to make it. And you’re going to need to start saving sooner rather than later, and you are going to need more saved than you anticipate” says Iaconis.

He says that part of the issue is the differential that exists between today’s working world and that of our parents and grandparents. “The Boomer generation had these great pensions and a healthy social security amount to live off of, often without relying on their investments as the sole vehicle to generate income. Those investments, for them, get to be the dessert at the end of the meal, the trip to Italy, as an example” he says. “However, many of us who are in the middle of our careers currently won’t have that same advantage by the time retirement rolls around—which is why it’s so critical to make your financial health a priority every single day, not just at the beginning of a new year like it’s a New Year’s diet. You can’t afford to ‘start-stop’ your financial situation or put it on the back burner. Every decision you make today impacts the long-term.”

“Every financial situation is unique, so what will work for one person won’t necessarily work for someone else. This is where finding a competent, trustworthy financial advisor who can give you advice, and not a sales pitch, helps you find a good direction to follow when it comes to your financial future.” Iaconis notes that there are several solid advisors in town, but for those individuals who are perhaps not in a position to engage in a high-end advisor, budget-friendly resources and solutions do exist. He encourages those people to start with the Dave Ramsey type of sessions that many churches and community centers offer throughout the year. “You can take your financial future into your own hands in smart, affordable ways. It just takes time, patience, and the foresight to know that you need to get your savings up and your debt paid down right now,” says Iaconis.

For more information about Level Four Wealth Management’s commitment to delivering objective financial advice, visit birmingham.levelfouradvisors.comtoday.

Stephen D. Iaconis, CFP® is a registered representative with, and securities are offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Level Four Advisory Services, LLC, a registered investment adviser. Level Four Advisory Services, LLC and Level Four Wealth Management are separate entities from LPL Financial.

Investing involves risk including loss of principal. No strategy, including diversification, assures success or protects against loss.

This article was prepared by Alabama Media Group.