december coverUna Vida Segura

Devoting time and attention to financial security amounts to a caring act toward yourself and your family. Beginning the process starts with a commitment to see it though. Set aside at least a day each month to start sketching your own financial picture.

“It’s important to know what your money’s doing, the sources of income as well as the outflows,” advises Mike Velasquez, a CPA in Glendale, California.

Grab bank statements, check books, pay stubs, and all your bills. Often, we regard these things as a grim necessity, like pulling a tooth. But $eguridad lies in the details.

Creating a Budget

Every financial plan begins with a budget. Although only 40% of Americans use a budget to plan their spending, 60% of Americans spend more than they can afford according to The purpose of a budget is not to keep you from enjoying the good things in life. Rather, it’s to keep your dreams alive and within reach.

“This is the stepping stone of any financial plan,” asserts Cesar Garcia, founder of Mayoria Global, which promotes financial literacy to clients in the New York area. “Everyone has to deal with a budget, from the CEOs of Fortune 500 companies to college students.”

Start with the positive side of the ledger, your income. Include all sources of income for you and your spouse each month such as salaries and wages, interest, retirement accounts, Social Security, etc. Then calculate your expenses by itemizing all of your bills, fixed and flexible, from your mortgage to your newspaper subscription. It’s also important to take a look at cash expenses. “Little things add up,” says CPA Fernando Rocha with Jim Oliver and Associates, in San Antonio, TX. “It’s also important to define your expenses as a ‘need’ or a ‘want.’”

Use the worksheets at right as a guide to calculate the difference each month, the amount available for savings and investments. The results may surprise you. You may find that you can cut back on certain expenses to balance the budget.

The process of creating a budget will help you evaluate your current financial situation. Take a look at the big picture and consider your financial goals. What things will need to be paid for you to feel financially secure? Do you have a child’s college education or wedding to pay for in the future? Or perhaps a long overdue vacation? Clarifying your goals will help produce a financial strategy.

Starting a Conversation

Once you’ve done all of the above, you can start to set priorities. It may be time to start a conversation with friends and family members, and to seek advice. You may want to seek the advice of a financial advisor, but before you do, Cesar Garcia advises that you do your research first. If you have access to a computer, go online and look for information about financial tools, like mutual funds or individual retirement accounts (IRAs).

Like peeling an onion, doing your research will invariably lead you from one layer to another, exposing more information about how you can achieve your financial goals. Only when armed with that information, should you begin the search for a financial adviser. “If you don’t have a computer, go to the library,” advises Garcia. “It’s essential that you get the information you need to make an educated decision about your financial strategy.”

If you don’t already have a financial planner, accountant, or broker, perhaps your friends or family members can help recommend someone. If that fails, don’t forget about your banker. Many times a bank or credit union has programs at its disposal to help maximize your earnings. “Everyone needs a financial coach,” says Velasquez. “From your uncle Charlie to a financial planner or CPA, we all need someone to bounce ideas off of.”

When choosing a financial advisor, make sure he or she is licensed. With respect to a specific financial product, be sure it is registered and that your financial advisor is licensed to sell it. Confirm this by contacting your state securities regulator, which you can find at

Most importantly, however, make sure your family agrees to whatever financial plan you develop. “You have to have your family buy in to the process,” cautions Rocha. “You can develop the perfect plan but it won’t work if you and your family are not on the same page.”

Valerie Menard