Financial Planning


Understanding Liability Insurance

Liability insurance can protect you in the event of serious injury, property damage or other economic liability. Thus, understanding liability insurance is an important piece of your personal financial plan.

One of the most common types of liability insurance is bodily injury and property damage for your auto coverage. It provides payment to others when you are the driver at fault in an accident. Arizona has minimum levels of coverage of $15,000 bodily-injury liability per person, $30,000 per incident (two or more people) and $10,000 for property damage ($15k/$30k/$10k). If someone has a $50,000 medical claim and you only have the minimum $15,000 in bodily injury coverage, they may pursue you for the remaining costs. More typical levels of coverage are $100k/$300k/$100k.

Another common type of liability protection is a vital component of homeowner’s insurance. Coverage typically starts at $100,000; however, to protect your family’s assets, $300,000 or more is advisable. If a guest or contractor slips and falls on your property, medical bills and lost wages can quickly add up to more than $100,000. Do you have a dog, pool or trampoline? Claims from these risks are common for pain and suffering, as well as for medical bills.

An umbrella liability policy is less common, though strongly recommended. Also known as a personal liability policy, it complements your auto and homeowner’s insurance by extending liability coverage where the underlying policies end. A car accident resulting in severe injuries can quickly exceed $500,000 in medical bills, property damage and lost wages, not to mention claims for pain and suffering. Any amount not covered by your auto policy could cause an action to be brought against you and your family for your personal assets (bank accounts, cars, home equity, wages). With a $1 million umbrella liability policy, you would have more sufficient coverage. In addition, the insurance company would pay for an attorney to represent you and negotiate with the other party.

More generous umbrella policies may also cover claims such as false arrest, libel or slander (such as a negative online review). Premiums for umbrella policies typically range from $250 to $500 per year for an additional $500,000 in liability protection.

By |July 1st, 2018|Financial Planning, Insurance|

Six Elements of Financial Planning

six elements of financial planningAt Perspective Financial Services, our client service centers on six key elements. In this 2-minute video, we summarize our six elements of financial planning and explain how our process benefits you. Click here to learn more about our financial planning and investment management services.



Photo credits for Six Elements of Financial Planning video: Mike Paulson, Rawpixel, BrainAJackson, CHUYN, Xstockimages
By |June 18th, 2018|Financial Planning, Video Blog|

Plan for Bittersweet Life Transitions

Lupe CamargoIt’s true. One day you’re holding a baby in your arms, and then the next you land where I am today – watching your child walk across the stage at her high school graduation, and entering into a new chapter of her life away from home. It does feel like a flash. How do you plan for bittersweet life transitions like this?

Reflecting back, there were many choices made along the way that helped create a path paved with options for her future. So much planning and preparation is required in raising a child. Ultimately, it is how we use resources under our control that can increase the likelihood of creating opportunities down the road for our child. Those resources include our energy, care, time, money, skills and experience. Success can come when all of these resources are carefully balanced.

The Next Stage

As I think about this next stage in life, I am delighted to see my daughter become a kind, independent and mature young woman. When that bittersweet moment arrives as I drop her off at college, I hope she remembers these life lessons my husband and I have imparted to her:

Only spend what you have. Living on modest means early on will give you freedom and options later.

  1. Be grateful for what you have and, for those things you have, use them wisely.
  2. Success is not measured by status or what car you drive. It is determined by who you are, how you treat others, and how you lead your life.
  3. Pay attention to the things that matter, and don’t get distracted away from your goals.
  4. You are part of a community, so remember to always give back and support those in need.

Shifting from an active participant to a spectator in her life will be challenging; however, I trust she is ready to handle what life throws her way.

I also share with her three things that I have always carried with me, and hope that she carries them forward as well: Be brave, be wise and be kind.

By |May 21st, 2018|Financial Planning|

Baby Steps to Your Financial Future

Baby Steps to Your Financial FutureMy wife and I were recently blessed with our first child. Like most parents, we were excited to start this new chapter of our lives as a family. Accompanied by all the wonderful emotions and thoughts of being new parents were our worries about providing for our baby’s future. My wife asked how we should save for his education, knowing the current economic environment requires that parents start saving for higher education costs as soon as possible. It’s natural to feel overwhelmed by this question, because there are many options to explore. Ease those feelings by taking baby steps to your financial future.

First Things First – Create a Budget

Before you can make an informed decision about how to start saving for post high school education, however, you should go back to the basics. Start by creating a budget that includes all of your current necessities (including saving for your own retirement) and then add all the needs of your new little one (items such as diapers, formula, baby clothes, daycare and so on).

Once you have that information organized and prioritized, you can decide how much can be saved for your child’s future education. The cost of education has been steadily rising over the last several decades. According to a USA Today report, the average inflation rate for university tuition is about 6 percent, double the national average for inflation.

Explore College Saving Options

One of the best ways to combat this problem is a college savings vehicle known as a 529 plan. Contributions to a 529 are invested in mutual funds to help your money keep up with or outpace inflation; earnings grow tax-deferred and, as long as the funds are used for education costs, the withdrawals are tax-free. There are many 529 plan options, and your Perspective advisor can help you compare and choose the one best for your family.

Having a budget and making a decision on how to invest for education is sure to free up time, so you can enjoy the fleeting moments of wonder with your new bundle of love. They are only babies for a short time!

Baby Steps to Your Financial Future Bonus: This article in the resource center offers a solid overview of 529 college savings plans.

By |April 24th, 2018|College Planning, Financial Planning|