When it comes to personal finance, one of the most common—and often frustrating—responses you’ll encounter is, “It depends.” Whether you’re asking about the best investment strategy, how much you should save for retirement, or how to reduce your tax burden, “It depends” tends to be the answer. While this might seem like a vague or unsatisfying response, it’s actually the most accurate and honest one you can get.
Personalized Financial Advice Is Key
The reason the answer is often “It depends” is simple: your financial situation is unique. While general guidelines can offer some direction, truly effective financial advice needs to be tailored to you. What works for one person might not work for another, and the right approach for you hinges on a variety of factors—including your age, income, lifestyle, risk tolerance, family situation, and future goals.
Here are some examples:
- “How much should I save for retirement?”
The answer depends on factors like when you plan to retire, how much income you need, the lifestyle you want, and what other sources of income (such as Social Security or pensions) you can rely on. For some people, contributing 15% of their income may be sufficient, while for others, that might not be enough. - “Should I buy or lease a car?”
This decision depends on how much you drive, how long you intend to keep the car, your current financial priorities, and the terms of the deal. Leasing could be ideal for someone who likes a new car every few years, while buying and holding on to a vehicle for the long term might make more sense for someone else. - “How should I invest my money?”
Your answer depends on your risk tolerance, investment horizon, and long-term financial objectives. A growth-focused portfolio that works for someone in their 30s may be too risky for someone in their 60s, who is more concerned with income generation and capital preservation.
Why Searching for Answers Online Can Be Misleading
In today’s digital world, it’s tempting to turn to Google for quick answers. A quick search can provide a wealth of information on topics like investment strategies, savings recommendations, and tax tips. However, there’s a major downside: Google doesn’t know your unique situation. While it offers helpful general advice, it doesn’t consider the full picture of your financial life.
For instance, you might search “How much should I have saved for retirement by age 40?” and receive a generic recommendation—perhaps saving three times your salary.
While that advice may be useful for some, it could be irrelevant to you if you plan to retire early, live in a high-cost area, or have additional income sources. While broad guidelines can offer helpful context, they can never replace personalized financial advice that reflects your specific needs.
The Power of Personalized Financial Guidance
We understand that “It depends” can sometimes feel like an unsatisfactory answer. You’re looking for clear direction, and understandably, you want a solid number or a definitive yes-or-no decision. But the reality is, offering a blanket response to a nuanced financial question would be misleading. This is why working with a financial advisor is so important. At SAGE, we take the time to learn about your unique situation, financial goals, and concerns, so we can provide advice tailored specifically to you. Whether you’re planning for retirement, navigating tax strategies, or deciding how to manage your investments, we can help you build a financial plan that aligns with your vision for the future.
Ultimately, “It depends” isn’t a cop-out—it’s a call for a deeper conversation, one that helps you uncover the right questions and craft a financial strategy that’s truly your own.
