As a new year begins, many financial resolutions start strong but fade quickly without a clear plan. In this episode of Wise Money, we break down five financial resolutions that actually create lasting progress, not just good intentions. From building a sustainable cash flow system to improving savings, tax strategy, protection, and long-term planning, we show how small, intentional steps can lead to meaningful change.
Season 11, Episode 20
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Transcript: 5 Financial Resolutions That Pay Off
It’s time for wise money with Korhorn Financial Group with certified financial planners Kevin Korhorn, Mike Bernard, and Josh Gregory.
Segment 1: Welcome to another episode of the Wise Money Show with Korhorn Financial Group, where every week we’re helping you take your next wise step in your financial life. Thanks for being here, friends. My name is Mike Bernard. I am your host. I’m also one of the certified financial planners on the program. And with me in the KFG studio is my business partners and fellow CFPs, Kevin Korhorn and Josh Gregory. As we head into a new year, many people will be making New Year’s financial resolutions. Unfortunately, many of those good intentions will be broken within just a few weeks. Today on the Wise Money Show, we’re counting down the five resolutions that truly make a difference in your financial life. From cash flow to savings, taxes to retirement, we’ve got the plan to help make 2026 your strongest financial year yet. No matter where you’re at, whether you are right now on an upswing where 2025 was fantastic and you’ve got a lot of momentum, financial momentum and hope for 2026, we want to make help you make it even better. Or if you’re struggling financially and you say, “Gosh, I I had some mistakes. I’m not where I want to be and I wish I was further along.” Well, you are one great financial decision away from an upward spiral. We want to help you with that as well. You can uh reach out to us several different ways. Leave questions or or connect with us. You can call or text us. 574222000. That’s 574222000 online. Wisemoneyshow.com is where you can reach out to us. And then all over social media, wherever you’re at, we are there as well. Search the WiseMoney Show. Guys, what is the difference between a financial goal and a financial resolution? Man, I I gotta tell you, when I hear resolution versus goal, my mind also goes to dream versus goal. I I think of them the same way. Um not that a resolution is just a dream, but it’s often kind of vague. It uh often, you know, we we attach it to a certain year quite often. Um you know, it’s just, hey, this year I want to get more healthy. I want to lose weight. I want to save more money. What whatever it is, I will resolve to do this, right? It’s just sort of like a declaration, right? And so it’s a good intention, but until you have a plan attached to it, it’s hard to raise it to the level of a goal in my mind. And same thing with dreams. You know, we talk to clients all the time who uh want to achieve certain things, but if you uh press them on, well, how like what’s the game plan there? Uh they’re not there yet. And and that’s really where planning comes in. It’s why it adds value to good intentions. It helps bring it to reality, makes it feasible. Um, so I I don’t know. To me, it great to set resolutions and have good intentions, but do you take it to that next step and turn it into a goal? Yeah, it it’s it’s interesting when you think about this and I think this is a good time to think about it because it feels like, hey, I’m putting to bed last year and I’m getting next year out of bed. And how how would you do it? And if you if you didn’t, you know, the older I get, the more I think about, all right, everyone just if if you have this problem here, just read this book because I’ve read uh so many books and if you I must have a lot of problems.
Well, I keep reading books to try to solve these problems and they they my problems are multiplying like rabbits. But if you said, “I want to figure out how do I do this this goal program?” I would encourage you to get the book Atomic Habits by James Clear. Yeah. And that gives you the idea even. So, just I’ll give you a little um here here’s a little uh spoiler. Uh he says if you’re going to start at the gym, if you’re starting January 1 at the gym, don’t get a three-hour workout lined up and go to the gym and work out for three hours and then, you know, not do anything. put your tennis shoes on, go to the gym, be at the gym for five minutes, and go back home. Yeah. Just get in the habit. And um I I think what you want, if I was going to, if you said, “Well, how do I do this with my financial life?” What you want is you want a powerful vision for your financial life. Where’s that going to come from? That might come from you. You might have a strong drive, a strong desire, a powerful vision for your financial life. If you don’t have one, you might need to co-create with someone who helps people have a vision for their financial life. Or maybe you need help with that co-creation of the steps to achieve that vision, right? And and moving that from an intention or hope uh or or a a resolve to an actual goal, no matter where you’re at financially, like I already said, we we want you to make meaningful and lasting progress in your financial life in 2026, no matter where you’re at. And that starts with having the right goals and the right steps to achieve that. It’s not going to happen by accident. So, like Josh said, we are counting down the top five financial resolutions, but but really putting some action steps behind them so that you can make 2026 your best year in your finances or making financial progress ever. So, counting them down today, starting with number five, and this is what we hit a little bit on last week’s show, and that is building a realistic cash flow operating system. You know, I I hear you say the word realistic, and another word pops in my head, and that’s sustainable also because um you might be able to come up with a game plan that will work for the next month or the next two months or something, but is it something that is sustainable long term? This is why in my mind I would get this quickly out of the the realm of resolution like something I’m going to work on this year and into more of like lifestyle change. But but this is also going back to that gym analogy from you know that Kevin shared, right? This is how often do people go to the gym at the very early in January and I’m going to get in weight and they’re they’re get in shape. I’m going to lift a lot of weights and get all excited and they do a year’s worth of lifting or exercising all at once and then they are so sore the next day but they say, “Oh, this sore is good.” And so you do it day number two, but by day number three, you’re just done because it wasn’t sustainable. You can do that in your finances as well. We’re going to cut cold. We’re never going out to eat again and we’re never going to do this again. And it’s just not realistic or sustainable. That’s exactly right. And one of the other ways that it can be not sustainable is by not truly having a game plan that covers all of the expenses that you have to have. Like you could start cutting some things out maybe temporarily and it might get the ball rolling. Maybe that’s what it would take for you to for example start a debt snowball. Begin eliminating some debts that then permanently eliminate some cash flow constraints or some obligations each month. And that puts you in a position now where you more permanently have some margin in your financial life. So I I I agree. I mean I would point everyone back to uh our previous show here about how to create the right cash flow plan. But it has to be something where you’re building margin so that you can build more margin and keep on uh rolling with this. And you might need an external stimulus to help you either get started or or stay on track. And I remember a long time ago, it it was probably more than 20 years ago when we uh sent every team member from Cohorn Financial Group to uh Dave Ramsey’s Financial Peace University. And I thought that this is great. We made a deal. Hey, if you show up to 11 of the 13 meetings, we’ll reimburse you for the cost. Wasn’t a whole lot of money, but we said, hey, we’ll pay for it. And and almost everyone took advantage of that. But then when as we were meeting and helping the team, they weren’t implementing. And it’s the most confusing thing because you’ll talk to folks and like, “Hey, I need you to talk to my son and daughter-in-law. They’re really struggling financially.” And what you know, what could we do? And I’m like, “Well, you know, one thing that you could do if they can’t hear it from you because it sounds like they can’t. One thing you could do is send them to Financial Peace.” Oh, they’ve been to that twice and read all the books. Mhm. So this is the problem. It’s not It’s not a knowledge problem. Yeah. And so when you look at your life, you say, “What is my problem?” If it’s not a knowledge problem, Henry Cloud says, “If you lack the maturity, I don’t I don’t look at it like that because in a lot of areas, I lack the fill-in- thelank. I don’t like to call it maturity because I think I’m mature, but if I’m I’m lacking something, I do need an external stimulus.” Yeah, I I agree. You know, if I was going to predict what is it that will cause most people to stumble in their cash flow planning, in their budgeting, it’s often the unexpected items that only come around sporadically. You know, most people don’t struggle with managing the monthly expenses because they show up every single month. You’ve got a lot of repetitions. Uh they’re familiar to you. It’s the things that sneak up on a quarterly basis or maybe once a year. Maybe it’s not even predictable when it’s going to show up, but you know it will show up. The car is going to need new brakes. It’s going to need to re, you know, have the tires replaced, that sort of thing. You might not really know exactly when, though. And so, the the bucket number two, if you were going to zero in on an area to build some great habits, it is looking at those non-monthly expenses and having a game plan for them so that your plan is sustainable. Yeah. It’s realistic. That’s right. And so this is why, again, we’re counting down, but this is why it it makes the list of a a financial resolution that will actually work and will actually create positive change in your financial life. Why? Even though it sounds boring, we’re talking about, you know, cash flow structure and that includes a budget, guys, cash flow is the engine for every other goal. Think about it. It this this is the engine that drives every other goal. If you want to be able to save up more, retire sooner, buy another house, pay down debt, whatever it is, cash flow is the engine. So, make sure that you’ve got the right cash flow operating system that will feed and drive all of your other financial goals. Work with your CFP on that. What are the other four financial goals, resolutions that you need to have as you start this year? We’ve got that and more coming up here on the Wise Money Show with Korhorn Financial Group.
Break 1: Hello YouTube. Thanks for being here. This is the Wise Money Show. What you’re watching right now is our weekly 1-hour talk show. There is right here on this channel every Saturday morning at 10 a.m. Also on podcast at the same time, but also on a couple local radio stations as well, which is why the content is structured the way that it is. First and foremost, it’s long form, so it is it is lengthy. Uh, but also we’ve got commercial breaks for the radio show, which is what we’re in right now. Try to feather in some bonus content there as well. But if you’re looking for something more direct, maybe even a short or something that takes one financial concept and more concentrated and help you apply it to your financial life, we’ve got a lot of content right here on the YouTube channel. Uh, next step videos that air every single business day. So, make sure you hit that subscribe button, turn on notifications so you’re made aware every time we drop new content, and if you like the content, like the content. Thank you very much. All right, I’ve got a bonus question. will hit at the next let’s do it at the at the next one. So, let’s resol number four and we’re we’re counting down. I’ve tried to say it three or four times to make sure that I just remind myself that. Just think uh I don’t even remember who sang that song. It wasn’t Asia, but it was the final countdown. Oh, yeah. Yeah. Okay. Hopefully, Lord willing, this isn’t the final countdown, but it is a countdown. I I think we Yeah. Okay. All right. Here we go. Good. Let’s have some fun. He’s taking over. Your job is in jeopardy. I know. Good. I just want to be the host. Finally.
Segment 2: What are your financial goals for this year? And is one of them to save a little bit more to get closer to that retirement? maybe even be able to bring that retirement goal even sooner in your financial life. We’re going to help you get there. This is the Wise Money Show with Korhorn Financial Group. Thanks for being here. My name is Mike Bernard with me in the KFG studios. Kevin Korhorn and Josh Gregory. Stay up to date on all wise money content. Find us online wisemoneyshow.com and then all over social media wherever you’re at. We are there as well. Search the Wise Money Show. Kevin keeps reminding me. We are counting down. We’re not counting up. We are counting down. Just to state that for the record, the top five financial goals or financial resolutions that actually work. These aren’t just flash in the pan. Okay, go out and have a a full year’s worth of workout in one session and then have it not be sustainable. No, no, no. What are the measured steps that you can take that are realistic in your financial life that will lead to lasting and sustainable positive change? One uh or number five. Okay, thank you Kevin. It was to have a realistic cash flow uh cash flow system. Number four is to increase your savings rate by 1%. We have been sharing this gosh this is the 11th year of the Wise Money Show. I I think we stated this in our very first year, but it is a very practical step and I I feel like I want to get badges for people cuz I talk to people all the time that that say, “Oh yeah, I just increase my savings by 1%.” Mhm. Yeah. I I love it. It’s not that different than a coach asking you to do more push-ups in the gym or do a few more reps or run one more mile or or whatever it is. Honestly, this is probably the number one challenge that I issue to clients over the years that I am the most confident in. Like I I show me someone who hasn’t been able to pull this one off. Now, they may not have had the confidence when you look them in the eye and say, “Hey, can you increase your contributions next year by 1%.” Sometimes, you know, they’re doing the the math like, “Well, no way. Where where would that be?” Because they haven’t crunched the numbers. They haven’t gotten into the cash flow plan to go find it yet, right? Um, but we know that that it’s there somewhere uh with the right attention, the right effort, the right motivation. And that’s kind of the point. Um, the client always provides the motivation because they’re the ones with the goals and the vision for the future. And it often requires that there’s some sort of a sacrifice in the present to make the future better. And a 1% increase in in your savings in any given year helps make that steady progress. It helps to get you ramped up to the kind of um firepower that it takes to be able to achieve some of your most meaningful goals. Yeah, I like what you said, Josh. you you need your three bank account system in order to give you the confidence to say I can do this. And so because when you think about financial goals, the question and I I love the question, should I achieve my goals sequentially or should I achieve them simultaneously? So a lot of times I’ve heard folks say, “Hey, listen. I got a lot of debt. It’s not good debt. I made some mistakes. Uh I want to just go hog wild and pay this debt off. Should I stop giving to my church? Should I stop saving my 401k? Should I stop doing these things and just bumrush this goal of reducing my debt? And then once the debt is paid, should I do this other thing? And this is this is where financial wisdom is really what you want to have and you want to apply because there’s not there’s not a right answer. If there was a if there was a a a book at at at at Barnes & Noble that you could go and get that gave you the right answer, everyone would be doing the same thing. It’s different for everyone, but for sure the sequence of saying, I want to take these next wise steps in my financial life. I have to have the foundation of that confidence. Now, I would tell you, listen, you’re not going to miss it. Like, you’re even going to forget that you actually did it increasing by 1%. Yes. And if you if you don’t look at your paycheck every two weeks or whenever you how often you get a pay stub, you’re not even going to notice the difference. Does 1% even make a difference? Yes. Yes. This is the this is the the the the big deal because I looked in about mid December and we serve a lot of companies with retirement plans. And one of the things that I’m most proud of for our team is that most of the retirement most of the companies that we serve that have retirement plans. They have participation rates in the at least in the high 80s. And their rates of return at least through the the middle of December was in in the in the range of somewhere between 15 to 17%. And I looked at that and I said, “Yes, yes, yes. These people are participating in the American dream. They’re not getting left behind.” Mhm. And so, and I’m saying most folks that are listening right now probably got an increase at some point in time that was at least 1%. I I I agree. You know what? Um, we have often said that the biggest goals that you’re trying to achieve, you can’t save your way towards them. You can’t just pile up some cash in the bank and hope to retire off of it someday. You have to compound your way towards those types of goals. and compounding over time with growth oriented investments is just necessary like you you can’t avoid it. I don’t know that there’s another path to get there other than inherit someone else’s compounding uh that they did, you know, uh some sort of windfall. But that’s, you know, that’s a dream, unfortunately. Um here’s the reality. In order to get more dollars compounding, you need to also be compounding even the amount of contribution that you’re doing. That’s what 1% more per year does because it’s not just going from 5% to 6% this year. It’s 5% to 6% and your pay has gone up. So, it’s 6% of a bigger number. And next year, what if it was 7% of a bigger number yet? And so, it actually gets easier and easier for some people to be able to stay on this type of a pattern. But what is the endgame? I guess getting ramped up to a level of of contributions that gives you enough um enough dollars to be able to go into growth oriented investments that you are putting yourself on the right pace. I would challenge you to think about that that budget that cash flow plan that we talked about in the last segment as being an 85% spending plan. If you could live off of 85% and that includes giving gifts at Christmas time each year. It means paying your taxes, paying your mortgage. If you could do all of that and have 15% worth of margin that you’re building towards that 15% of firepower, that’s your goal achievement money. That is where all the magic happens in your long-term goals. It’s what you need to deploy into those compounding investments. Yeah, that’s where I, you know, I asked the question, does 1% really matter? It absolutely does. In the moment, it might not. And that’s that’s the power of it because in the moment it’s probably not you’re not even going to feel it, like you said, Kevin, but this is the risk. This is the risk of you saying, “No, I I was able to bench 300 lb in high school. I haven’t worked out in a decade. I’m going to go bench 300 lb.” Like, you hear the 1%. You say, “Don’t you guys understand? I’m trying to make financial progress. I’d love to retire a year earlier. 1% I’m going to increase what I’m doing to the max. I’m just going to max it out and figure it out. Now, that I don’t know if that’s sustainable. I’d rather Now, if you think you can and you’ve got the three bank account system to back it up, then go for it, right? With the right coaching and all that, but just on a whim, I would increase it by 1% and then do the same thing next year and then do the same thing same thing next year. But before you talk about, well, what do you invest in? You do need to answer where do you invest? And so, that’s where you got to leverage your tax diversification strategy. uh your tax shelter strategy and confirm well should that go into the Roth side of your 401k this extra 1% should it go into the Roth side of your 401k should it go to your Roth IRA should it go to your HSA those contribution limits have increased all pretty significantly for the upcoming year for 2026 and so make sure that you’re working with your CFP and you do that I I’ve got one other sort of secret with this you know we’re talking about real change like resolutions that will actually work automate all of your savings. Automate all of your savings. And and it used to be I would say automate all your savings and none of your expenses. And boy, I stood on that ground for a long time. And culture just swallowed me up. You’re not you’re really not able to do that anymore. Uh you know, subscription services, Netflix, all that sort of stuff. It you’ve got a lot of expenses that are automated. Uh I would try to do it at you know, have as few of those as possible, but not so with your with your savings. I would automate all of your savings. That’s going to be a way to help you uh to to help you, you know, make this a reality. So guys, any other thoughts on increasing your savings 1%? I Oh, I can think of I So Roth IRA, you guys know Kevin even already teased me about it earlier. It’s, you know, I I’m a big fan of the Roth um the Roth contribution amount changes a little bit every year. So, if you’re automating your Roth IRA contributions, be on the lookout. Make sure that you might need to update that 50 bucks a month or whatever to make sure that you’re hitting the maximum. But the other thing is if you’re automating your Roth contributions, you’ve got to make sure that you’re still eligible to be contributing to a Roth. A lot of times, your income, your household income starts creeping up above those thresholds where you’re you’re still automating your Roth contributions and no one sent you a letter saying you’re not allowed to do this, but you’re actually making too much money. and when you go to file your taxes, you’re going to find out you weren’t allowed to make that Roth contribution. So stay on top of that. And if that sounds awful to you, good news is your financial adviser loves that sort of stuff. So work with your CFP on that. All right, we’ve got more financial goals that actually work that more coming up on the Wise Money Show with Korhorn Financial Group.
Break 2: Okay, what book doesn’t need to be financial. What book have you given out the most in your lifetime? This is, you know, we’re just past the season of giving, but Kevin, you brought up, you know, the atomic habits. I I would I think I think Atomic Habits is mine. That’s what made me think of the question. I think I’ve given that out and I have actually had some people like months later come back and be like, why did you give me this book? Like, did you think I was doing something wrong? It’s like, no, I didn’t. I was just I found it super helpful and I think it is I I think it’s a must readad for everyone. Yeah, everyone. I I told you guys the story of when I first read slash listen to Atomic Habits, I think. I don’t remember, but I’d been with both of my sons and both of their friend groups for the entire weekend. And we had gone up north and we’d rented a little Airbnb on a lake and had lots of fun, but it was all about them all weekend. And um I like to think of myself as a fairly giving person, but as Toby Keith once said, I want to talk about me. Uh and so so I had three Caleb and Peter and Jonah in the truck and we’re heading back and they had picked the music that we listened to. I mean, it was everything. What the food we ate, the music we listen to, the activ everything. I’m like, “Listen, guys, you’re all tired. You stayed up way too late for the last few nights. You’re tired. I have this book that I want to get into that I haven’t been able to. So, I’m going to I’m going to listen to it on the way home. We got a three-hour drive. I’m going to listen to it. So, I started playing Atomic Habits, and all three of those little potlickers stayed awake the whole time and listened. Eating it up, huh? Yeah. And and when we by the time we got back, they’re like, “Okay, we want to get a copy of this book. This is awesome.” And it really is it it’s a great road trip book. It’s a great whatever you’re doing. It is a great book to to listen to. I the book I’ve given out the most I think uh by a multiple of five or 10 is probably the Bible. Um I met a guy uh at a conference one time and he came up to me. He’s like, “Hey, I know you.” And uh I’m like, “Okay.” Um and he’s like, “Yeah.” And and and so we’re going I’m like, “Yeah, dude, you don’t know me.” And he’s like, “Yeah, no.” And he’s trying to figure out how we know each other. We didn’t. But we got going and he’s a financial adviser down in Texas and they he he’s part of a not forprofit that that uh prints Bibles and gives them out. Awesome. And so, um, we’ve gotten in some of the work that we do in schools and other things, we’ve we’ve gotten boxes and boxes and boxes of these things and it’s really awesome. The the business one, yeah, the business one, it’s somewhere between What the heck is EOS? EOS. Yep. What the heck is EOS? and the E-Myth Revisited. Yeah. So, it th those two. You stole my E-Myth Revisited on the business side. Personally though, one of my favorite gifts to give when someone has their first child is the Jesus Story Book Bible. Oh, you gave that to us? Did we? Y I we’ve given that to so many people. It is, it’s one of my favorite books, period, because it takes the whole story of the Bible, like from start to finish, and just shows how Jesus is woven through the entire thing. And it’s written in it’s written for children, but man, it’s written for adults. Really, I love it. It’s so good. All right, third segment. And we got to get to number three and hopefully starting number two. We’ll see. Holy Hank. Just bang your elbow. Yeah. And not bang it. Just Just tapped it. So, here we go.
Segment 3: Do you have any financial goals around insurance? That sounds contradictory. Sounds sort of crazy. We’re going to help you have a vision for that. This is the Wise Money Show with Korhorn Financial Group. Thanks for being here. My name is Mike Bernard. With me in the KFG studios, Kevin Korhorn and Josh Gregory. Every episode of the Wise Money Show is on podcast wherever you listen. Just search the Wise Money Show. Subscribe to it there so you don’t miss an episode. But also rate the program there as well. That’s helpful feedback for us, but also helpful for helping others find the show and others who are on their journey to take their next Yep in their financial life. So find us on podcast and subscribe there. We’re counting down the top five financial resolutions that actually work, that will actually create an upward spiral in your financial life. Number five was having a realistic, a sustainable cash flow system. Number four, increase your savings, your retirement savings by 1%. 1% doesn’t make a difference. Well, in just one year, it might not. Over a lifetime, a career, it absolutely will. But 1% this year, and then 1% next year, and then 1% the following year. Pretty soon you’ve got compounding on top of compounding throughout your career. Makes an enormous difference. Number three, and these words are intentional. Resolution number three, create financial peace through optimized protection. Most people think financial peace comes from number one, they think high income. That’s absolutely not true. We’ve seen it countless times. But then the other one, if it well, if it’s not high income, it’s got to be net worth. it’s how much I have in the bank. Uh I think there was a famous rapper who once said more money more problems. So that certainly can’t be true either. Um the truth is and we’ve done some shows all about financial peace and helping you achieve it. It’s about balance and it’s about having integration of all six areas of your financial life. So yeah, having the right income, but really the right margin, yep, that’s cash flow operating system. Having the right savings and and not having too much debt, yep, that’s net worth. But if you’re not protecting it well, if you if you don’t have a great answer for uhoh, if this happens, what will happen to me? If you don’t have a great answer, I don’t know how you have financial peace. Yeah. You know, sometimes we use the the phrase financial freedom in lie of financial peace. They have similar connotations and everything, but to me, one of the the foundational elements of having financial freedom or financial peace is freedom from worry. It’s separating yourself from the crisis living that is just pulling at all of us, right? Uh we we would many of us naturally live on every dollar that we earn. Like we go right up to the edge. We might uh spend down assets because the money is in the bank. So why not go do something fun with it and keep yourself razor thin on reserves and not much of a safety net? It’s just natural for us to get close to that edge of the cliff of of financial crisis. And so to separate yourself, one way is what we’ve been talking about several times on this episode already is make sure that you’ve got a spending plan that has margin and cushion in it so that you can absorb the unexpected that comes along. But it also involves making sure that you’ve got adequate reserves. You know, I think of the emergency fund, which is bucket number three in the three bank account system. This is just a pool of dollars that you set aside out of sight, out of mind. Hopefully, you forget you’ve even piled up these this safety net because you’re hoping that you never have this type of an emergency. But you think about like major car repairs, major um health concerns, maybe there’s a significant home repair of some sort, uh maybe an interruption to your income, whatever it is. These are the types of things that can send you spiraling in your financial life if you don’t have the initial emergency fund in place. And a lot of times that is part of the recipe for you then as as you use the word optimize, optimize your protection planning or your insurance planning. Make sure that you’ve got the right level of deductibles and things selected so you can save money and your premiums. You can only do that if you have the right reserves in in place. Well, and the and there’s so many big benefits to the right reserves, including uh if I when I get my insurance renewal, if I can pay my insurance annually instead of monthly, I typically most insurance companies are going to give me a nice discount uh on on my policy there. And the other thing is if if you know, it’s been a hard market and rates have been going up. Um so I I’ve got the money to pay the extra little extra thing. I get, you know, the uh the emperor who I rent my land from uh just sent me a little Christmas present saying, “Hey, your your tax bill is due.” And they they actually increased what I get to pay them. Oh, lucky. So, yeah. So, you have to be ready for these things. Yeah. Uh protection planning. So, a couple of weeks ago had an embarrassing slip and fall. And while I’m in the urgent care waiting to find out uh just how bad I broke my arm cuz I was pretty certain I did. Uh I was watching the video, the next step video that was airing that day where I had talked about make sure you have an emergency fund. You never know when you could fall and break your arm or something could come up. And certainly uh that is crazy how how that happened. But same thing, you know, I was super fortunate. Um you know, conked my head, bad concussion, could have been a lot worse. very much could have been a lot worse. And I’ve had friends shatter elbows and been out of work for a long time, multiple surgeries, never like getting back to normal. And you know, I I didn’t even realize I hit my head and, you know, could have been so so so much worse when you get and and I I don’t even remember slipping. It was just immediately I was on the ground and it you know, accidents happen like that. Yeah. and and almost like there’s no way I like oh my goodness could I just go back to that moment and just do this little thing differently and this wouldn’t have happened but listen or or go back to that moment and just get a little bit better prepared right for what’s coming then that and that’s my point because as soon as the event happened and you think oh gosh if only I could have just avoided this if you then are are stuck with this financial worry of but I’m not prepared I’m not ready I we needed more life insurance before I got that diagnosis. Oh my goodness, wait a second. Why did I not get the disability coverage? Oh my goodness, why, you know, why did I not sit down with my agent to review my coverage on my home? Because this is now I’ve got this big issue. You don’t want to have that worry, right? So stay on top of it. Optimize your coverage looking at the five major financial risks that we all deal with universally. And hopefully you’re getting closer and closer to self-insured. But you’ve got to review those. It’s the risk of of of passing away when you have un unfunded goals. So needing life insurance or not, right? The risk of needing to work but not being able to. So disability income insurance. The risk of having a health emergency and uh you know say I needed surgery on the elbow and all that sort of stuff. Did did is there health insurance to help cover that or are you self-insured there? Many people it makes sense to make sure you’ve got catastrophic coverage. um the risk of not being able to care for yourself, your own activities of daily living. And many people are striving towards being financially in a spot where they’re self-insured there, but do you need protection for that? And then the last one, the do do you have a plan for the risk of of of property damage or some liability that oh gosh, I I made a mistake and something bad happened and that’s home and auto insurance. So, review that with your certified financial planner. have them collaborating with your insurance agent to ensure that your coverage is consistent to your unique financial life. So that’s resolution number three. It’s actually actionable and can help make sustainable progress in your financial life. Resolution number two, again, we’re counting down top five financial resolutions that actually work implement a new tax planning strategy. And I I I love this one. I’m reminded of uh a meeting that all three of us were in recently where uh it was a pretty nerdy conversation because uh we got to learn about the four different levels of tax planning. You remember that? Yeah. And uh the the first level was basically taking what you’re already doing, but optimize it. You there might be a better way. It could be that you’re saving for retirement. Great. But is there a better way for you to do it? maybe you should be using Roth accounts instead of traditional or vice versa. Uh maybe the way that you’re giving could be optimized as well. But the the point is there are strategies that could be improved in what you’re already doing. The level number two though is hey there might be new things that you could be adding but it’s going to cost you something like it’s going to take some additional sacrifice. Maybe uh there are more deductions on the table than you’re taking advantage of. And the way to take advantage of them is to pile more money into a retirement account because you’re in such a high tax bracket. There’s savings there, but you’re going to have to um you know come up with some dollars to to make it happen. The third is more of uh how do you uh kind of integrate or combine some strategies that that exist out there? maybe using uh we’ll probably unpack this more uh later, but qualified charitable distributions that help you reduce your income in a year so that you can do some Roth conversions. We talk about that combination quite often. Um but then number four, he he joked, is going too far and getting into fraud, right? But the the point here is do you know what your options are on the table when it comes to tax planning? Yeah. In each of those three levels, right? Can you optimize more what you’re doing? Are there new strategies or their combo of strategies? So, all right. We’ve got more here coming up on the Wise Money Show with Korhorn Financial Group.
Break 3: Okay. Uh, all right. Short break. Let’s go. I mean, let’s go deep there. Let’s share a couple of potential tax planning strategies. We’ve got we’ve got the time and then we’ll um whether it’s at the 5 minute mark or whatever hit um number one and we’re landing in the plane. Landing the plane. All right, let’s do it. Here we go.
Segment 4: Thanks for being here. This is the Wise Money Show with Korhorn Financial Group. My name is Mike Bernard. With me in the KFG studio is Kevin Korhorn and Josh Gregory. Every episode of the Wise Money Show as well as a lot of other content is on the Wise Money YouTube channel. Go to YouTube, search the Wise Money Show, subscribe to it there. We appreciate that. And then turn on notifications so you’re every time we drop new content. We’ve got lots of content there. Not just these talk shows, but next wise videos that air every single business day. So lots of content nearly I think over 2,000 videos now and shorts as well. So, so helping you take your next wise step in your financial life. All from a comprehensive financial planning perspective. So go to YouTube, search the Wise Money Show. All right, we’re counting down the top five financial resolutions that actually work, that will actually create sustainable change, not a flash in the pan. And we’ve worked our way down to number two, and that is implement a new tax planning strategy. I I want to be clear with this, and Josh, you you talked about the three really the three different levels of tax planning. And this goal or resolution, don’t implement a new one just for newness sake. Don’t don’t just well I should just be doing something extra so I guess I’ll just do do this one. No, I would want to ensure that you are leveraging proactive tax planning versus a reactive tax approach. Okay, reaction is what you’re going to do here in a couple months. Get all those tax forms that you were sent in the mail, get the right number in the right box, and see what the result is. That that’s all reactionary and you’re required to do it. So, it’s necessary. But proactive tax planning is before you file that return or before we get too far into the year taking a look at what are the ways that you could pay the least amount of tax over your lifetime and and identifying those. But then your tax planning needs to be implemented with your financial plan because you should be able to come up with a list of five, six, seven things there and but then determining well which of those do you implement? Which of those make the most sense when looking at all six areas of your of your financial life? Or which of those are just good ideas but not ones for you to implement right now? I’m so glad that you pointed to the six areas of financial planning when because that ultimately is where you find the answer on is this a tax strategy for me or is it just one that’s on the table that might be a good idea for somebody else. I was actually just talking to a a good friend of mine. Uh he’s a longtime listener of the show actually. uh talking to him on the phone last night and uh the topic of tax planning came up and uh he’s a business owner and I was I was just asking him, you know, what kind of advice have you been getting uh when it comes to tax planning and he said, you know, at the end of the year uh we kind of have a conversation about how the the year is going. I have an idea of where I want my income to fall and I ask my tax preparer, well, what should I do? And the advice is often, well, go buy another piece of equipment because the uh the depreciation’s running out. And you know, there’s nothing wrong with that strategy necessarily if you needed the piece of equipment, right? If if there’s a business use for it, great. But that’s where uh good tax planning is taking what you’re already wanting to achieve, what you have a a life purpose for or a business purpose for, and then finding the very best way to approach it from a tax standpoint, as opposed to the other way around, letting the tax tail wag the dog, so to speak, and um for the purpose of saving some taxes, I’m going to go do these things. That’s why in your personal financial life, there may be some amazing strategies for you to be taking advantage of that are also in alignment with your biggest goals. You know, saving for retirement or helping your kids with with college. That’s awesome. Let’s find the most tax sensitive or tax efficient way to do it because it’s important in your life, not because we just want to try to starve Uncle Sam. Here’s a couple of uh in a couple of weeks we are going to be talking about and going deep on the rules for transitioning your 529 plan to a Roth IRA. That might be a new tax strategy that makes sense for you. That would be a a good goal. Hey, I I want to learn that and if it does make sense for me, I want to get started on that. I I would say one of the simple ones but very very common is uh leveraging your HSA to an even higher potential. A lot of people, and I think it’s just how we’re wired with the flexible spending account, the FSA came first. People look at the FSA, which is which is use it or lose it, and they are conditioned to, well, I’m only going to contribute to my HSA, which is not use it or lose it, up to the amount that I think I’m going to spend on medical expenses this year, but nothing more. No, no, no. Max that thing out, right? That might make the most sense. And even beyond that, shoe box it where you invest those dollars and you cover your out-of- pocket medical expenses out of cash flow, saving your receipts and letting your HSA grow. There’s a lot of different tax planning strategies that may make sense for you working with your CFP, making that list, and then determining, well, which ones make the cut and which ones do you put on the shelf and consider out there in the future. So, all right, that’s led us all the way down to resolution number one. And this is the one that sort of encompasses all of them and the ones that we weren’t even able to hit and and that is create and follow a comprehensive financial plan. Josh, you sort of complimented and and touched on the six areas. The compreh a comprehensive financial plan is looking at all six areas of your financial life. But it’s not just looking at those separate and distinct areas. That’s not this that’s not the big idea. The big idea is that those six areas are actually more connected than what you can really even see or appreciate. And you want to when a financial decision needs to be made, you want to use wisdom, the best choice that brings the most synergy to those six areas. Uh yeah, I agree completely. You know, going back to that friend I was just uh mentioning a moment ago, the conversation, the reason he was reaching out to me was uh because he was interested in making an investment. He had a stock idea that he wanted to run by me. And um you know as we got to talking o opening up an investment account might be a solution for him. But what he needed first was financial planning. And uh and he realized that right away that maybe now is a time as he’s approaching his own retirement in you know some some years down the road. Um how do I get the right coach in place? How do I have the right process for making the decisions in especially when it is getting down to crunch time? Uh you know, we talk about the retirement red zone as you’re getting closer to retirement or you’re just a little ways into retirement even. Uh are you making great decisions at that point that are consistent with your overall financial plan? And that might be the strategies that you have in mind or it could be new ideas that are revealed through the planning process. Right. And absolutely when you make the very best decisions they are taking all areas of your financial life into consideration. We talk about your present financial position and the goals that you need to be achieving that are most important to you. Do you have uh your assets and your liabilities structured as efficiently as possible? Are there any lazy assets that are are sitting around not doing enough work for you? we get into protection planning and making sure that you um have the the right insurance or emergency fund like those lines of defense to keep you from going backwards in your financial life. Tax planning is a crucial part because it’s often where dollars slip through the cracks. Investment planning is what most people think of, right? Often it is the presenting question like, “Hey, I have all this money. What do I do with it?” And the answers often come in that fifth area, retirement planning and college planning together. That’s where you’re uh figuring out what is it going to take for you to achieve those goals. And then finally, the capstone to any good financial plan is your estate plan. And uh what happens with the assets, the resources that are left over when you’re done with them in this life? Um how do you make sure that your stewardship responsibilities pass to the next steward in in the right way? And that is the context for making the very best decisions. That’s more than a a New Year’s resolution, though. That is a a pattern that you want to establish for the rest of your life, in my opinion. Yeah, I I totally agree with you. And it’s the problem with financial planning. It’s kind of simple in concept, but it’s complex in execution. And most people aren’t able to um do it themselves. Some people can, some people can’t. Most surgeons can’t perform surgery on themselves. Maybe some can, but this is where you say, “I want to have a a pro showing me how to do it. I want to have a powerful vision for my financial life.” Don’t let your adviser have a more powerful vision for your financial life than you do. And don’t let your doctor have a more powerful vision for your health than you do. You need to lean in and grab the reins and and start putting your left foot in front of your right. The journey of 1,000 miles begins with a first step. This is this is not you’re not going to solve this in an acute manner. It’s chronic. It’s going to be over time, not in one moment. So, there you go. What What are your big goals for this year? Hopefully, you have some health goals, some relational goals, some spiritual goals, some some work goals as well and growth, but what are your financial goals? I think if you establish a sustainable cash flow operating system, you increase what you’re contributing to your retirement by 1%, you optimize your protection so that you have financial peace, you implement the right new tax planning strategies, and have all of that part of a comprehensive financial plan. You’ll make great progress in the year ahead. That’s all the time we have for today. On behalf of Josh Gregory, Kevin Korhorn, all of us at KFG, have a great weekend. We’ll see you next Saturday for the Wise Money Show with Korhorn Financial Group. Securities offered through Silver Oak Securities member FINRA/SIPC. Advisory services offered through KFG Wealth Management LLC. Join business as Korhorn Financial Group. KFG Wealth Management LLC and Silver Oak Securities Incorporated companies are unaffiliated.
