LifeSteps Financial Briefing | September 2019
Henry's Take
The market continues to swing, tariffs are still up in the air and air strikes on Saudi Arabia have sent oil prices up. Yet, mortgage rates are at a low. This is our new normal. We expect to experience continued fluctuations and challenges as the market responds to national and international events and occurrences. As we have discussed in the past, we need to have a long-term mindset with short-term vigilance. We continue to monitor all of the moving parts daily and suggest changes when we see the need. 
Speaking of need, our focus this month is in addressing Financial Literacy. As our society becomes more sophisticated and the next generation better informed than the last, it’s important that we make sure that the next generation is prepared for adulthood and understands the value of financial security. Many times, this is not addressed in school. Now that the kids are back in school and in learning mode, this could be a good time to start the discussion about money management. Even the youngest of children can learn the value of managing their pennies. Whether you start it as a game or challenge or work with them to understand how to value possessions or money, you plant the seed that will grow. We’ve worked with children’s groups in a number of ways and can provide some ideas if you need a starting point. 
If you need any help in sorting out the economic swings or if something has changed that you would like to discuss, please feel free to give us a call. 
?Henry Ford, Principal
Managing Financial Wellness

Financial Literacy: It's Never Too Early to Learn
Preparing for school can be overwhelming, even for families who can afford an expensive education for their children. Family financial literacy, planning early and defining clear goals will make the process smoother.

Family Financial Literacy

Financial literacy is an imperative life skill. Yet, for many of us, it is elusive, if not intimidating. Unfortunately, finance classes are not required courses in most states. In fact, according to Forbes , fewer than 20 states require any education about finances at all.

As a result, young people may look to parents for information. But not all parents are comfortable discussing family finances with their children. Such reluctance can leave kids rudderless in a sea of overwhelming choices. This is where mistakes happen, creating financial burdens that can negatively impact an individual’s ability to achieve important life goals.

By teaching your kids proper money management, you are creating a pattern of good money habits that can provide financial stability later in life. Helping children set up long- and short-term goals is a great way to let them navigate financial responsibility with a safety net. We teach our kids how to use so many tools; money should be one of them.
September is National Preparedness Month
Our colleagues over at American Business Bank recently sent us a reminder about the need to be vigilant and prepared for earthquakes. While we focus at LifeSteps Financial on being vigilant and prepared with finances, this reminded us to be equally vigilant and prepared for unexpected acts of mother nature. In California, that means earthquakes and fires. Here are some of the most important considerations for earthquake preparedness:
  • Family Earthquake Drills, especially for younger kids to learn how to protect themselves. (Covered in detail in the FEMA Earthquake Safety Checklist, pages 9-11)
  • First Aid Kit and Manual
  • Flashlights in every room of the house beside each bed (with extra batteries)
  • Gas, Water and Tools so that everyone (of appropriate age) in your household can turn off the gas and water valves (with a pipe wrench or crescent/adjustable wrench); write down the instructions
  • Portable or Solar Radios and Portable/Wireless Cell Phone Chargers (costs as little as $23 on Amazon)
  • 1 Gallon of water per person per day for at least a 72-hour period
  • Kit Storage Locations: Home, Work and Car
  • Supply of cash (small bills too) for use if ATMS, banks, and credit cards are not operating
  • Copies of important documents (insurance policies, health insurance, bank and credit card statements, copies of marriage/birth certificates, copies of family trusts, wills, etc.) in a bank safe deposit box or fireproof safe
  • No heavy picture frames or mirrors over beds
  • Fire Extinguishers
  • Special Medications
  • Extra supplies for pet needs

Additional resources can be found below:
The Facts
58% of 5,000 Americans surveyed currently participate in an employer-sponsored retirement plan or they have begun making pre-tax contributions to an IRA.
Source: Center for Financial Services Innovation
?Used with permission from By the Numbers
The average American worker who retires in 2020 will have paid $36,000 in Medicare taxes during his/her working lifetime , far less than the $229,000 in Medicare benefits that he/she is projected to receive. The projected lifetime benefit total is net of Medicare premiums paid by the retiree.
Source: Urban Institute
Used with permission from By the Numbers
Terminology: Risk Management

Risk Management Is a term used in finance. Basically, it is the practice of identifying future or potential risks in advance, analyzing them and then taking the necessary steps to try to minimize or reduce the risk.

A well-balanced portfolio should be designed with a variety of assets, including (but not limited to) equities, fixed income, real estate, traditional assets and, perhaps, even non-traditional assets.
Fixed income (bonds) is designed to protect the portfolio in the event of a downturn in the market. It may not eliminate the risk, but should help minimize it. Equities are considered to be riskier than bonds, but designed to provide higher returns. Generally, investments that are less risky will also provide smaller returns.

When determining the potential upside or downside to any risk you should:
  • Identify the potential risk.
  • Analyze both the pros and the cons.
  • Evaluate how the various outcomes could change in the future.
  • Decide on a course of action.
  • Continue to monitor the risk as events change (in either your finances or personal world).
Giving Back
This month's featured charitable organization is  Children's Fund .

Since its inception in 1986, Children's Fund has assisted more than 1.4 million children. Children's Fund serves as a safety net for the at-risk children in local communities. They are positioned to leverage donations to help provide vulnerable children with essential services and resources.
This report is for information purposes only and is not a recommendation for any particular security. Mention of individual securities should not imply that we own the security or have owned it in the past. In addition, the information provided here should not form the basis for investment decisions. Past performance is no guarantee of future results. This information should not be used in any transaction without the advice and guidance of your Tax Professional. LifeSteps Financial has not independently verified, or attested to the accuracy or authenticity of the information, including any investment performance measurement.