On the latest “Total Financial Solutions Safer Money Hour” on KHTS AM-1220, Santa Clarita financial advisor Arif Halaby offered listeners valuable insight on the importance of considering the long-term effects of today’s financial decisions.

The way we choose to spend and save our money now often affects us for the rest of our lives– something that we should all try to be aware of when it comes to our finances, according to Halaby.

Show Host Arif M. Halaby

“We have to kind of lay down a foundation that says we’re going to be having money have its own job to do, and each time that we have money that has a job to do, we have to stick to it,” he explained.

For example, when Halaby was in his twenties, he didn’t see a problem with withdrawing thousands of dollars from his IRA. But in the long run, Halaby realized that by making that decision, he lost valuable funds in growth, taxes, penalties and fees.

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Those who pull money from retirement and savings accounts– which are created for long-term goals –to spend on recurring expenses like credit card debt or to pay off a vehicle often find themselves in exactly the same situation down the line.

“If you’re using money that is built for the long run to pay for things like credit card debt and you haven’t changed your behavior, surprise– six months or six years from now you will be right back in the same boat,” Halaby said.

He continued, “We saw this a lot when people would refinance their homes and pull cash out to pay off things like a car or an RV or credit card debt. And then two years, eight years later, the car is broken, they’re back into credit card debt. But meanwhile, the home equity has already been eaten up– that’s gone –so now you have it twice, both in the home equity that you’ve taken out and in the new credit card debt.”

Usually, decisions like these are ultimately counterproductive to individuals’ goals for the new form of retirement that allows them to work where, when and with whom they want, according to Halaby.

“Retirement is not just about sitting around at home,” he said, recalling clients who work four to six months out of the year as hosts at a campground in exchange for staying for free, sometimes bringing in a small salary.

Other “retired” individuals may choose to work part-time at a store to bring in a small amount of income and build up their social security credits while getting the benefits of being around other people.

“The decisions that we make are not necessarily subject to this flat number that says, “Today, I– poof –retire,’” Halaby said. “That doesn’t work, but an early retirement can lead to a whole host of wonderful things, up to and including building a financial life that is around your values.”

Total Financial Solutions offers assistance with preparing for retirement and financial planning in Santa Clarita and the surrounding valleys. Owned and operated by Santa Clarita financial advisor Arif M. Halaby, a Certified Estate Planner, Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners from Santa Clarita financial planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

24322 Main Street

Newhall, CA 91321

661-753-9683

800-990-7344