“Could-have, should-have, would-have” stories are particularly painful when they were easily preventable. Then, self-blame hits hard and sets in. As a tax and financial planner, I compulsively wish for anyone to make informed financial decisions leading to their desired future. Yet, regrets are all too common, especially with health and wealth.
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Graphic: Tax and Financial Regrets? 5 CPA Tips to Break the Cycle
1. Improve Your Financial HealthFor health matters, we intuitively understand what we should do to avoid and remedy problems—such as self-care and timely checkups. To help us, our brains, finely attuned to our biological wellbeing, give us bio-alerts like thirst or pain. We may not always be disciplined or proactive about health, but we generally know how to care for ourselves. As such, medical regrets are often expressed as: I wish I acted sooner. By contrast, what will get us in trouble with money isn’t always clear. The complexity of financial life keeps growing fast, and the rules regularly change.
Investing among the universe of retirement accounts alone can seem as complex as a moon launch. Then, making that money last a lifetime can feel as hazardous as safely landing back on earth. To boot, our complex and often nonsensical tax code is full of traps for the unwary. “It’s unfair” or “it doesn’t make sense” are words tax-preparers often hear. Sadly, the missteps people make generally have good alternatives—if only they had been aware of them. Therefore, financial regrets are often expressed as: I wish I had known sooner.
Meet Our CPA and Tax Expert: Jean-Luc BourdonBio: Jean-Luc Bourdon, CPA, PFS, Wealth Advisor
2. Make Informed Decisions To make informed decisions, we need to understand the pros and cons of the possibilities available to us. For financial and tax matters, that’s rarely obvious and commonly counter-intuitive. Informed decisions shed light on the forks on the road. They replace guessing with intentionality, confidence, and peace of mind. That’s why we can’t afford to ignore tax and financial planning. It’s not about money as much as it’s about avoiding setbacks and securely pursuing our desired future.
One of the saddest client meetings I’ve witnessed was with a client who had ignored money matters her entire life. She always got by and felt her lack of financial interest was virtuous. But with her health failing and retirement looming, she started learning about her financial planning options. Mostly, this was very late. As she suddenly realized how mindful financial decisions over her life could have dramatically improved her current options, the weight of that realization had her sink low into her chair. Such heavy regrets were heartbreaking to see.
3. Apply Reliable Information to Your Circumstance Today, there are more financial resources than ever before, both good and bad. To make informed decisions, the problem is no longer access to information but finding reliable ones.
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The next challenge is applying reliable information to our personal circumstances. There always seem to be exceptions that make rules-of-thumbs unreliable. Yet, for those committed to financial self-care, resources exist to make it possible.
To get professional care, the financial planning profession is offering a greater number of well-trained planners than ever before. Once a rarity, financial planners with a college degree in financial planning, or a related field, are now common. A wide range of fee arrangements is increasingly available, such as hourly fees for example.
4. Don’t Forget: Tax and Financial Planning Go TogetherTax is always the most pervasive element of financial planning. It’s like a parasite feeding on every aspect of financial life. Consequently, many CPAs naturally develop financial planning expertise, sometimes adding the Personal Financial Specialist (PFS) credential which is exclusive to specialized CPAs. Similarly, many financial planners add tax planning expertise, generally with the Enrolled Agent (EA) credential.
5. Start Tax and Financial Planning NowHere are 4 things you can do right now:
Commit to a regular financial-care routine to regularly learn about, review, and improve your financial wellbeing.Start with a financial checkup to determine the areas of personal finance you most wish to improve. For instance, consider taxes, estate planning, risk management, budgeting, debt management, and planning for long-term goals.Identify key financial resources you can rely on. You may want to build a professional advisory team, gather a financial library, or both.Ask yourself: What does greater financial well-being mean to you? What would it take? What are the obstacles? How do you get there? What steps you can take now?Regardless of the options, you choose to make more informed tax and financial planning decisions, remember they’ll help you avoid regrets. Most importantly, they’ll empower you to intentionally choose a desired future. The winds of financial empowerment are constantly blowing. Don’t ignore unfurling your sail.
Jean-Luc’s articles are not intended as tax, legal or financial advice for any particular individual. They’re information only. The ideas mentioned may not be right for you.
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Zachary Faulds contributed to the writing of this article and produced the video and/or the graphics associated with it.