Navigate Common Financial Challenges

Financial challenges come in different shapes and sizes. Some build up over time, others are completely unexpected.

Below is a list of the most common financial problems faced by individuals and families in California. We’ll review some of the best ways to build financial resilience and share a few case studies from our Bay Area wealth management clients.

8 Common Financial Challenges

1. Change in marital status
2. Job loss or income reduction
3. Emergency home or vehicle repair
4. Economic downturn (recession, market drop)
5. Unexpected illness or injury

Of the unpleasant scenarios listed above, the inability to pay for healthcare is the most common. Collections agencies report 57% of debtors have overdue medical bills. CNBC reports:

• 41% of adults in the U.S. have medical debt
• 63% of adults with past-due medical bills had health insurance when they began incurring debt

While you can’t predict if you or a loved one will need emergency medical care, the challenges below are somewhat preventable with financial planning.

1. High Levels of Debt — Including credit cards and loans
2. Family Financial Obligations — Such as tuition costs and childcare
3. Insufficient Retirement Savings — Caused by market downturns or poor planning

How to Safeguard Your Future

Below are a few ways to build financial resiliency. Because everyone’s financial situation is different, it’s best to seek professional advice for your unique circumstances.

An Emergency Savings Fund: Ideally, you should have enough cash (or other liquid assets) to cover several months of living expenses.

Debt Management: There is good debt, such as a mortgage payment you can afford, and bad debt, such as high-interest credit cards or loans. Minimizing bad debt is essential to financial health. 

Insurance Coverage: A good policy can shield you, your assets and your nest egg from unfortunate surprises. Review and update policies whenever you have a significant life change.

Diversify Investments: Minimize your exposure to market volatility with a varied portfolio. A wealth management professional can help you choose the right investments based on your objectives and risk tolerance.

Retirement Savings: The best time to start a retirement account was 20 years ago. The next best time is right now. It’s never too late (or too early) to start saving for retirement.

Estate Planning: Work with a professional to ensure your will, trust, etc. is legally valid and reflects your wishes.

Professional Guidance: Consult with a financial advisor who can craft a personalized strategy tailored to your unique financial situation.

Regular Reviews: Periodically revisit your financial plan with an advisor to ensure it’s in tune with your evolving financial needs and goals. 

The information above is an abbreviated sample of the detailed, actionable advice included in our free eBook, Your Financial Journey of a Lifetime. This free guide includes proven strategies to help you foster financial resilience and navigate financial challenges. Even if you already have a strategy in place, you can use the guide to confirm all your bases are covered.

Financial Strategies for Professionals in the Bay Area and Beyond

At Assembly Wealth, we specialize in wealth management for individuals and families in Marin County, Silicon Valley and the Bay Area. We’re also proud to have long-term clients who started with us in the Bay Area now live elsewhere. Below are a few (anonymized) examples of how we’ve helped people navigate financial obstacles and meet their financial goals. 

Electric Vehicle Executive Dreams of Early Retirement

PROBLEM: An employee at a leading electric vehicle company wanted to retire before age 50. He had most of his net worth tied up in company stock and options, which left him vulnerable to market swings. 

SOLUTION: We collaborated with his CPA to develop a roadmap for early retirement. The plan included diversification and risk management. The client is now on track to retire before age 50 and pursue his passion for coffee roasting.

Buying a Dream Home With Interest Rates on the Rise

PROBLEM: With interest rates on the rise, two different families approached us for help securing an affordable mortgage rate for their dream homes. 

SOLUTION: Working against the clock, our team leveraged a relationship with a partner to ensure the deals closed before interest rates went up — saving the clients a significant amount of money.

A Tax Burden Becomes a Positive Investment

PROBLEM: A client had a $50,000 taxable income burden created by two life insurance policies they didn’t need. 

SOLUTION: With the guidance of a financial advisor, the client established a donor-advised fund and donated the two policies. The immediate income tax deduction brought joy to both the client and their community. The fund continues to grow tax-free, ready for future donations, leaving behind a legacy cherished by generations to come. 

Questions? We’re Happy to Help

Whether you’re facing a financial challenge and don’t know where to turn, or you want peace of mind about your financial future, we’re here to help. Our experienced team can help you navigate rough waters, protect your hard-earned assets and achieve your long-term goals. Contact us for a personalized financial strategy.