Financial Planning for the Great Resignation

[00:00:00] Mike: When we talk about financial planning, it's really using your resources to accomplish what you want to have more of in your life, what you find most meaningful in your life, both now and in the future, and have more of that.. Welcome to financial planning for entrepreneurs and tech professionals. I'm your host, Mike Morton certified financial planner and charter financial counselor. And with me today is our great friend Julie, welcome back. 


[00:00:31] Julie: Thank you glad to be here. 


[00:00:33] Mike: So awesome to have you. We are gearing up Julia and I, we talked about running last time, which I heard some great feedback and in a couple of days, we are actually running our marathon. 


[00:00:44] Julie: Yes. And the pre-show recording was just as griping about how everything hurts, how 


[00:00:50] Mike: That's right. It just, before we jumped on here, we're both like I'm exhausted and everything hurts, 


[00:00:56] Julie: My back hurts and oh, what were you thinking? 


[00:00:59] Mike: But we're ready to go. So when we record our next ones, maybe you'll hear our celebration of, we made it. 


[00:01:06] Julie: Or we'll be dead. 


[00:01:07] Mike: That's right. That's right. What are the, or this might be our last podcast. So today Julia had sent me a topic that I really loved around the great resignation. Okay. And I love what's going on here because to me it's people really reevaluating their priorities. 


And so we wanted to talk about that in the context of financial planning. So the great 


[00:01:32] Julie: Back up and say, what is the great resignation? 


[00:01:35] Mike: the great, what is the great resignation? Oh, good wait. People haven't heard of this. So you, might've heard unemployment's kind of high and it's not really going back down and there's less people looking for work. 


Less people in jobs, you've been out to the restaurants where the lines are long and you're waiting for service. There aren't the employees, nearly as many employees. And so a lot of people have left their jobs or aren't going back to work or combination of both. They are quitting jobs. 


Jumping ship to other jobs, starting their own side, gig or side hustle, or just stopping work for awhile. And so this has been dubbed the great resignation where people are leaving their jobs. 


[00:02:12] Julie: Yes. And it's a phenomenal time to recruit. However, you have to be ready to put your money and your perks, where your mouth is. 


[00:02:21] Mike: that's exactly right. Yeah. Businesses are. Pretty hard time finding the right people and they're having to up their wages and benefits. And in fact, I was just reading. Topic wages have been going up right around, different companies, but the benefits have been really slow. And I can understand this from a company's perspective from an individual, of course you want everything you can get. 


And that makes sense. But from a companies you can never take things away. I don't know. Julie, have you ever tried to take something back from your kids? Like you gave them, some allowance, Mt or something, and then you're like, wait. Oh, that might've been too much. I'll try to take that back now. 


You'd never go in backwards. 


[00:02:55] Julie: No, like the tooth fairy. Oh, my word, one day we were, we didn't have any small bills. And so one of the kids got $20 for a tooth and now they expect $20. Every time they lose a tooth, you have any teeth, kids lose 


[00:03:10] Mike: $20. 


[00:03:12] Julie: Yeah, exactly. Yes, I know what it feels like to have to try and take something away. 


[00:03:16] Mike: Correct. And so I think that's great. So I think, that's when the business perspective, that as soon as those benefits, they bumped them up any amount that's going to be really hard to go backward. So they're just cognizant of that, you know, and aware and maybe waiting a little bit longer to see if that's something they have to do. 


So good point of there and the great resignation and just a couple. Highlights and some numbers here, we thought getting back this fall, we'll be getting back to normal. The extra unemployment benefits were ending. So I thought, oh that'll lead people to get back into the workforce, no longer getting those extra federal stipends or payments from unemployment. 


And also kids going back to school, I thought, okay, that'll drive people to get back into work, but in September, the numbers were actually even worse. They were from that state. There were another, 5 million less workers and another 3 million less even looking for work. So it continues on right. 


[00:04:06] Julie: Yes. And it's interesting. I was reading an article about what you talked about and one of the, a few of the big factors that are contributing to this great resignation are the first of all, the lack of confidence in the kids going back to. Sure. They're back. But how often are they going to be quarantining at home? 


And that was a concern. Even for me, my third kid went to kindergarten and I was thinking, okay, now I can finally pick up a real job or one that takes more time anyway. And then it, towards the end of the summer, when the Delta variant kicked in, we were like, you know what, this it's not going to be a good idea. 


I feel like we're going to end up being home anyway. So I'm sure that is playing a huge role. And people just don't feel great about being in an office again, 


[00:04:51] Mike: Correct. Yeah. Yeah. There's a couple of factors there that you mentioned exactly. The kids going back well, they're back, but are they really, they can be easily out of school for a couple of weeks, as soon as their pool testing or if they test positive or, exposure or whatever it is, and then yeah. 


Getting back to the office, a lot of people just still are not. And even people looking for jobs or not, they're evaluating the job opportunities and saying, ah, and that's where the benefits come in, does it have to be back in the office? Am I ready to go and take that kind of job? 


[00:05:19] Julie: Yeah. And those of us who were fortunate enough to at least have had one member of the household retain a job. We saved a lot more than we would have in prior years. We were not going out for dinner. We didn't go on vacation. We didn't do anything really. So all of that extra money is put aside to give us the flexibility, to make choices instead of being forced into a position. 


[00:05:43] Mike: Yeah, that's exactly right. So that's what we want to talk about. Some of these, financial planning. Tips or things to be thinking about if you're in this situation, whether it's evaluating, going back to work, evaluating switching jobs if you're young and want to continue to be flexible, to take advantage of experiences, what should you be thinking about from a financial planning perspective? 


So that you don't shoot yourself in the foot, down the road. So let's jump into that savings one. Cause that was definitely on the list here that just, as you mentioned, you saved money because. No, you weren't going out. Nobody's going. I was like, you didn't go on the vacations. You weren't even dining out as much. 


And so the bank accounts have got a little boost to them from the last year. And that's true across the board. The numbers are amazing that you thought, oh geez, pandemic. It's going to be terrible. We'll savings went way up credit card debt went down, savings balances and check-ins and savings accounts went up. 


So you're exactly right. That not only your situation, . Part of that's the unemployment, like we've mentioned before being a little bit higher so saving those and just from, families , not being able to take advantage, so savings have gone up. 


So that's fantastic. So that's giving people the confidence, I think, to, be a little more picky about that next job, or thinking about switching jobs or having that flexibility or taking some time off of work. But I think it's really important on that. To understand , what that savings is that you have in the bank. 


It's good to feel confident about it, but understand what that is, how much you have, how long that can last and be realistic about it. So if you're currently unemployed and okay, that's okay, because I've got some good savings. Okay. How much are you spending from that? How long can that last and what's appropriate, to leave yourself with some emergency savings as well at the end. 


[00:07:25] Julie: That's a great sort of segue or not, or I guess, I don't know. Part of the conversation is, people had more in savings and likely put a lot of that into a booming market. And a booming market is not sustainable. Historically speaking markets go up and down, which means that it's very likely that we're heading for a down. 


So what should we be doing to plan for that? Should we be moving money around? And should we think about what that could mean in terms of our timeline, going back to work. 


[00:07:57] Mike: Yeah. 


So a couple of comments there, one in the portfolio. So again, it's giving people confidence and I think that's, feeding into this great resignation that not only did you have some extra savings from not going out, but the stock market has gone up. So your and your house value has gone up. 


So everyone's feeling. You know the economy and when you go outside, it's not good. And we're still in COVID and Delta variant, and all of that. And that worry for the kids and environment, our community, but the net worth has really ballooned for a lot of people, not only savings, but house prices and stock market. 


And so that makes you feel really good. So you feel comfortable spending more money which is fine, but I think it is good to recognize too. When we talked about the savings. Okay. How much do you have? How much are you spending? How long can that last? And the other is your point, on the investments. 


So I separate the two a little bit. You can rebalance your portfolios. Good. Always good. When the stock market has gone done well, but understand what is your emergency? Within that portfolio or how you're using it and be ready for any kind of downturn to your point. I think we're in a situation the way I frame it as this, would you rather have a big portfolio with mediocre future returns or a small portfolio with better future looking returns? 


And I think we're in the former. Okay. So in other words, I think we have larger portfolio. And we're feeling really confident. Good about that. But I think future returns may be a little bit flat or not as good as the last 10 years. Okay. So just recognizing that and saying, Oh, okay. Be a little defensive. 


I can't spend as much as I might think I can, based on my net worth of, it's got to sustain me For 5, 10, 20, 30 years, and so those kinds of. 


[00:09:42] Julie: When you say rebalanced my portfolio, where should I be putting some of that money that might be in the overlay? Large Stockport. 


[00:09:51] Mike: Yeah. So when we talk about portfolios at the highest level it's between stocks and bonds is always the kind of first split. So how much is invested in stocks and companies, public companies, and how much has been, what we call fixed income. Which is both IOUs the bonds. Lending money out and they're going to pay me back. 


And also just literally in cash, in my money market account or checking or savings or CDs. So that's your high level split and say you were 50 50 between those two. Okay. The 50 that's been in the stock market for the last two years is now ballooned to 60%. It's gone up really well. So now it's 60% and the fixed income is 40% because it just doesn't, it hasn't gone. 


So now that you're at 60% stocks and 40% fixed incomes, you might want to rebalance back to that 50 50. So you would sell some of those stocks while they're quote unquote high, right? They're reaching all time, record highs. They might still go up. I have no idea what's happening next, but you want to then sell some of those cause they're high and you buy some of the fixed income, get back to the balanced for you and your family and your situation. 


[00:10:52] Julie: Okay. I liked this idea and I loved the analogy. I don't remember if it was you or I, that came up with it. But that black Friday deal that really struck a chord with me when we talked about having money in the stock market, when a tie is great, it's going to go down so rebalance. 


Put more money back into bonds. And when the market does go down, then you have that black Friday moment where you're buying low and it has nowhere to go really, but up and again, this is all long-term strategy, but it resonated with me in that it was a way to relate managing an investment portfolio, which can feel really daunting to somebody who's not a finance professional to something in real life that. 


I understand on a day to day basis. 


[00:11:39] Mike: Yeah, no, that's a really good point, Julie. I always say that to buy stocks when they're on sale and they're certainly not on sale right now. Are they fairly priced over priced? I don't know. And if you have cash and you want to, get some of that in the market now, it's fine. You should get that in the market if it's a long-term money. 


But to your point, right now, I've said this in multiple podcasts right now. I believe it's a time to just be a little different. I'm not saying sell anything or make drastic moves, but just have that mindset. Hey, I need to be ready. All right. So make sure that you're ready and you have a plan. And part of that plan is when the, those stocks go on sale, which they will next year, two years from now, five years from now, at some point it will dip again, be ready with your plan to go ahead and buy while they're on. 


[00:12:20] Julie: Cool. 


[00:12:21] Mike: Yeah, so that's the savings. And just to hammer that home, just make sure that as if you're not currently in a job and you're looking for that next opportunity, make sure you understand how much you're spending every month, how long you can keep going, looking for the opportunity or what you might need, in terms of what you have savings the circling back a little bit. 


What I love about this, the great resignation idea is the priorities. Okay. So this is my next point around financial planning. When we talk about financial planning, it's really using your resources to accomplish what you want to have more of in your life, what you find most meaningful in your life, both now and in the future, and have more of that. 


And part of the pandemic, of course, lots of it has been terrible, but a lot of it has gotten people to reflect on what is most important. They've been forced into. Different situations. Now they're at home. Maybe now they're out of a job, unfortunately. Or the kids are at home and it's a whole different environment and situation, and it's forced everyone to think about what do I like about this? 


What do I not like about this? And I think that's great in terms of understand yourself and what's really important and meaningful to you. And that's where we always start with financial planning. What do you actually want to use your time? And energy and money to accomplish both now and in the future. 


And so this has been a great reframing for people to start thinking about that. And that's why I think we have this resignation that people have realized, you know what? I hated that hour commute twice a day, and being in the office, for 10 hours, that was terrible. And it turns out I don't actually have to do that. 


That's amazing, and then other people just recognizing oh, I want to take advantage of life while I'm young, or I have energy and I'm gonna take some time off work. I don't need to work right now. I don't need to make the money. Great. If you've evaluated that and said, that's where your priorities are right now and in the future. 


That's fantastic. So I love that. Really getting clear on your private. 


[00:14:17] Julie: Yeah, I do too. And that was something that was really important to my husband and I and something you were really good at when we first started working with you is getting us to set up those priorities. , what is our main goal in life and use. Finance strategy to support those goals and those goals change over time. 


Maybe not fully, I think, ours are health relationship and our kids experiences and retirement, right? So those, I don't think will change, but within this. It changes. And when you talk about, for instance health, one of the things that we enjoy doing throughout the pandemic was our kids get really into downhill mountain bike. 


And it's fun and it's it's healthy and it's engaging. It's slightly dangerous. But I have kids who enjoy that. But it's also expensive. So we've rejiggered and said, okay this is part of our health and our kids' experiences and our relationships, it feeds to all three. 


So Rejigger some of how we're doing our finance planning to make sure that we can support this new, slightly expensive hobby. So I do think you're right. The great resignation has given more people the opportunity to do what you've been telling your clients to do from day one. So kudos to you for being on the forefront of that. 


[00:15:36] Mike: no, I it's just, that's what financial planning to me edits core. It's not always just about the money and finances. That's the tool that most people think of first, but it's your time and your energy, and to your point, Julie, how do know, you discover a new activity, that's feeding your value. 


And what's important to you and how do you use all those resources? All I got to take some time off work, or I need to, work a little bit more to make money so I can do this vacation next summer. Whatever it is, you're making that trade off to meet those goals, but being clear on the goals first, because that's life, that's, what's important. 


[00:16:07] Julie: for sure. But I think most people think about financial planning simply as just retirement and. When you're in your thirties or forties or wherever you are you know that's in your, you've got young kids, like you're not thinking about retirement and you always think I have plenty of time for that. 


But as we all know, here we are. Another holiday season is approaching. And think about one year ago, how different the world was. And yet already we're here again. And it has everybody says it flies by, so if you're. Taking that into account and planning for retirement, it will sneak up and bite you later on, but incorporating that into the overall setting of goals, not just, yes, you will retire one day for sure. 


But what does that really mean? And you have these goals now you're going to have the same goals when you're retired. So how are you going to fund those both now and in the future? 


[00:17:03] Mike: Yeah. 


And it's all shifting, that's, what's exciting about life in general. I Retirement used to be, think about our parents and going through one job for their career and then, having retirement. And then I look at the other end, kids coming out of college today. 


And they're just floating around having lots of different experiences and different types of jobs and stuff. And I think it's amazing. That's why I always frame it. Your goal. And in the future, because we're living life right now. So it doesn't make a lot of sense. If I give you a plan that's for 10 years from now, you'll definitely just put it on a shelf, like sure, whatever I've got stuff I gotta do tomorrow. 


So one thing I think about there is that long-term savings, right? So put away a little bit of money today, , whether it's in your 401k, your IRAs things for the future. So you're thinking about your future self and how you might want to enjoy life and the ways that you want to do it with your family and your life. 


But you do want to think about that and put away some things for the future. That's part of planning is putting away some. Time and energy and money to be able to be used in the future. And to your point around health, same exact thing, right? Investing a little bit of time in your health so that you have that nice health span, not just lifespan ahead of you. 


[00:18:15] Julie: Sure. And this brings up a really good point with regard to the great resignation right now, and people choosing jobs and a lot of people are moving jobs. And so both my mom and my sister have just taken new positions. My mom, because her company was insisting, everybody go back into the office and during the pandemic, they moved their office from. 


30 minutes from her house to an hour and 20 minutes from her house. And we're insisting, she come in and her job , she can do it fully remote. And she said, I don't need to do this. I'm going to look somewhere else. And it was really funny because one of the, one of the arguments of her boss was w there's no remote jobs out there. 


You'll never find another job. Let me tell you, she got recruited by about four different companies for remote positions, so they are out there and it does give you. An idea of re-evaluating what you get out of your job and that could include benefits. And that was something my sister looked at where she said, the benefits package at this company that I've been with for 10 years has never been good. 


It's not going to change. The work is fine, but do I really want to work for this organization? And so she stayed in the same field, but went to actually a competitor simply because of. And they had better benefits and, it was a different opportunity for her in terms of experiences as well. 


And so going back to this great resignation and a long-term plan. Sure. The retirement part of it is important because you can think about what the benefits include on the job market today, but also. We've been home for almost two years now. And what do you really want to do in your job? 


And do you want to do it from an office or do you want to do it from your home and. 


[00:20:01] Mike: And there's no right or wrong. And there's different opportunities and people enjoy different parts of that. But I think it's given us that perspective, on that. And so lastly, on that point around moving jobs is one of my other points to really think about if you are jumping. 


Okay. Either resigning from a job to take some time off, or if you're going to take another job just really be careful, be aware. Julie's already mentioned the benefits. Looking forward to that next job and saying, what are the benefits that I really want that then? Are they great? 


You can do negotiations around all of that stuff, of course. But before you leave a job, make sure that you're taking advantage of opportunities. They're maxing out your 401k, your HSA or FSA. Any other benefits that you have before you leave a job, think through those things as well, and. 


Take advantage of benefits on both sides. 


[00:20:48] Julie: I'm going to throw a plug in here for you because I think it's important and I know you're not going to suggest this on your own podcast, but people really ought to speak to a professional financial planner or advisor, because oftentimes you don't know what you don't know. And that information is critical to making a good decision for you and your family. 


So whether it be you or somebody else they really ought to seek some sort of advice from somebody. 


[00:21:16] Mike: No, I appreciate you saying that. It's funny. I was smiling when you were saying that, because the end of every article that I read, around these topics, cause I'll do research, we're talking about, something on the podcast or whatever, looking up some articles and the end of everyone is like contact your financial advisor before making any of this. 


They put that this almost a disclaimer, on every article, make sure you check with a professional, but it's a good point that, you know, especially depending on where you are in your career, you just want to check in and. And it doesn't have to cost a whole lot or anything like that. 


You can just literally looking at your benefits customized for you. 


[00:21:45] Julie: Yep. For sure. And don't rely on your companies or your prospective employers, HR office to do that for you because incentives aren't aligned. Find somebody that, has your best interest at heart and will give you the right advice 


[00:22:01] Mike: Yeah. Yeah, no, that's great. Great point. That's what I had on my list in terms of kind of financial planning around the great resignation. I'm sure there's other things, but anything on the top of your head to it that we haven't discussed around this. 


[00:22:13] Julie: No, I think we covered all of it in in as much detail as you can do on a podcast. For sure. 


[00:22:17] Mike: Yeah, that's right. That's right. This has been great lots of good tips and thoughts on the great resignation and really appreciate you being here, Julia, and bringing up a lot of these great topics and sharing some of the stories from your own, personal stories about how it's affected you and your family and things that you're finding benefits and stuff in it. 


[00:22:35] Julie: Oh, I'm always happy. it's stuff. I wish I would've learned much earlier in life. And so if this gives me the opportunity to encourage people to do it, then it's worth it. And don't forget to contact your financial planner 


[00:22:48] Mike: that's right. Disclaimer. Perfect. All right. Thanks Julie. We'll see you next time. 


[00:22:53] Julie: Yeah. 


[00:22:54] Mike: Thanks for joining us on financial planning for entrepreneurs. If you like, what you heard, please subscribe to and rate the podcast on Apple iTunes, Google play Spotify, or wherever you get your podcasts. You can connect with me on linkedin or mortonfinancialadvice.com. I'd love to get your feedback. If you have a comment or question, please email me at . Until next time thanks for tuning in