Suzanne Stewart
Staff Writer
There are so many sayings about money – money doesn’t grow on trees, money can’t buy you happiness, money makes the world go ’round, money is the root of all evil. It’s enough to make your head spin.
Taking care of your financial health should, in theory be simple. Keep track of how much you make and don’t spend more than that. But things happen. Cars break down, houses need repair or worse, you get laid off or lose your job.
It’s a daunting task, but luckily there are people out there who know how to help. Like Marlinton native Chad Burns.
Burns is a financial advisor with Northwestern Mutual of Bridgeport. While Burns has an office at the Bridgeport location, he comes back to Pocahontas County a couple weekends a month and sets up shop at The Hub in Marlinton to meet with clients.
During one of those weekends, Burns gave a few helpful tips for those concerned about their financial health.
First, it’s never too early to start a savings accounts.
“Really, as soon as you can,” Burns said. “I say get started as young as possible. I educate my clients that have kids that are high school age – start teaching your kids good habits now when they’re in high school.”
If a teen starts college or enters the workforce without a savings account, Burns said they should wait until they have some income flowing in before they open one.
“Wait until after college, but as soon as you start making some income, get started as soon as you can as far as financial planning goes,” he said.
Burns has the same advice for retirement. Start paying into retirement as soon as possible.
“As soon as you can get into investing and retirement, the better your accounts are going to be long term because compounding interest works in your favor,” he said. “The more money you can stash away early on in your years – you let that compound and grow and invest over forty-plus years – you’re going to be in a lot better shape as opposed to living through your twenties, willy nilly, and waiting until thirty or forty to get started.”
When it comes to budgeting, Burns said there is a rule of 60/20/20 where 60 percent of your income should go toward fixed expenses, 20 percent should go into savings and retirement and the final 20 percent is for fun like going out to eat, to the movies, etc.
“That’s a good rule of thumb to stick with,” he said.
When that rule isn’t followed or those lines between the percentages get a bit blurred, debt comes into play.
“Getting into credit card debt is typically living beyond your means,” Burns explained. “You have to look at your budget. See what you’re bringing in. See what your fixed expenses are.”
Credit cards are great when used properly. Some have rewards and cash back incentives, but when used incorrectly or when one person has too many credit cards with bad interest rates, it is easy to get in over your head.
“Credit cards can be a good thing when used efficiently,” Burns said. “Personally, I don’t use a debit card. I put everything on credit card and just pay it off each month. It limits my liability. The liability lies on the credit card company if it were to be hacked for whatever reason.”
Burns advises that there is no need for an individual to have more than one credit card. Due to work expenses, he said he has a personal credit card and a work credit card and makes sure to keep things separate.
“I would say, realistically, the general population should have just one credit card,” he said. “You can have a five-thousand-dollar limit or ten-thousand-dollar limit – but you never want to go over thirty percent of that limit. For example, say you have a credit card that has a ten-thousand-dollar limit – you don’t want your credit card debt to be more than three thousand dollars.
“If you keep it higher than that on a regular basis, it starts to ding your credit score,” he continued. “It will impact your credit score in a negative manner, but as long as you stay under that thirty percent range, three grand out of ten grand, it actually does well for your credit score.”
This also helps with payments. The lower the monthly bill is, the easier it is to pay it off each month. When you only pay the minimum fee each month, the interest rates will make it harder to get a credit card paid off in a timely fashion, which adds to the debt.
Burns adds that it’s better to use a credit card instead of a debit card because there is more protection for credits cards and it is easier for a debit card number to be stolen and used. If a credit card number is stolen and there are fraudulent charges, the bank or credit card company takes on the burden of recovery of the funds spent fraudulently.
For those who are in debt and are trying to get back in good standing, Burns said it’s important to look at the interest rates on the debts first. Those with higher rates need to be paid off first.
Once out of debt, it is good to get on the 60/20/20 track to ensure there is a savings account or emergency fund, as well as plenty of funds to pay for fixed expenses. If you don’t spend a lot of money on “fun,” such as going out to eat, concerts and other entertainment, what is left of the 20 percent for fun can also go into the savings.
Burns attended West Virginia Wesleyan College and received a business administration degree and an MBA.
“I didn’t really know what I wanted to do,” he said. “I knew I wanted to be impactful. I wanted to have a purpose in my career, so I explored different careers in the finance realm because that’s what I enjoyed doing.”
For more information or to schedule a meeting with Burns, he may be contacted at 304-624-5400 extension 237 or at chadburns.nm.com