• A Roth conversion before year-end may make sense if your income is lower than usual, you expect higher taxes on future retirement withdrawals, or you want more tax-free income in retirement.
• Converting moves money from a traditional retirement account into a Roth account. You generally pay income tax on the taxable amount now in exchange for potentially tax-free qualified withdrawals later.
• Before converting, consider the tax cost, how you will pay it, and whether the additional income could affect other parts of your financial life.

Why December 31 Matters for a Roth Conversion

If you want a Roth conversion to count toward this year’s taxes, the conversion generally needs to be completed by December 31. That is different from making a regular IRA contribution, which may be allowed until the following year’s tax filing deadline.

Some people assume they can make a Roth conversion in April and apply it to the previous tax year. That’s not how conversions work.

I also encourage people to avoid waiting until December 31 itself, and make the important year-end financial decisions now. Financial institutions have their own processing procedures and deadlines, and December is a busy time.

You Don’t Own All the Money in Your Traditional IRA

This is something I talk about frequently because I think it changes how people look at their retirement savings.

When you put pre-tax money into a traditional IRA or 401(k), you are making an agreement with the government. You get a tax benefit now, but you agree to pay taxes when you withdraw that money later.

So, while your name is on the account, you have partners in that money. Those partners are the federal government and, depending on where you live, the state government.

A Roth conversion is essentially a way of buying out those government partners.

You move money from a traditional retirement account into a Roth account and pay the applicable income taxes now. In exchange, future qualified withdrawals from the Roth can be tax-free.

Of course, the question is whether buying out those partners today is a good deal.

What Is a Roth Conversion and How Is It Different From a Contribution?

People often confuse Roth conversions with Roth contributions, but they are two different transactions.

A Roth contribution involves putting new money into a Roth account, generally from your income or savings. Direct Roth IRA contributions have income eligibility limits and annual contribution limits.

A Roth conversion involves moving existing money from a traditional retirement account into a Roth account.  

There are no income limits preventing you from converting a traditional IRA to a Roth IRA, and there is no annual dollar limit on conversions. You may also be able to move eligible money from a workplace retirement plan, although plan rules can affect your options.

The converted amount is generally added to your taxable income for the year, to the extent the money has not already been taxed. You can convert a substantial amount, but that doesn’t necessarily mean you should.

When Does a Roth Conversion Make Sense?

There are several situations where I like to take a closer look at Roth conversions. None guarantees that converting is the right answer, but each creates an opportunity worth evaluating.

You’re in a Lower-Income Year

Lower-income years can be particularly attractive for Roth conversions.

Maybe you recently retired but haven’t started collecting Social Security. Maybe you changed jobs, took time away from work, started a business, or received a smaller bonus than usual.

Whatever the reason, your taxable income may be lower than it was during your peak earning years.

That creates an opportunity to move some retirement savings into a Roth account while potentially paying a lower tax rate on the conversion.

I especially like examining the years between retirement and the start of required minimum distributions on tax-deferred retirement accounts. Depending on your circumstances, those years may offer some useful room for conversions.

You Have Cash Available to Pay the Taxes

This is one of the first things I look for.

If you are going to convert money and owe taxes on that conversion, I generally prefer that you have money outside your retirement accounts to pay those taxes.

Otherwise, you may end up using part of your retirement savings to cover the tax bill, reducing the amount that makes it into the Roth.

That can change the economics of the decision considerably.

You Want More Flexibility in Retirement or for Your Heirs

I like clients to have money in different tax environments.  Having tax diversification allows for flexibility and options as you move through your non-earned income years (retirement).

Traditional retirement accounts, taxable brokerage accounts, and Roth accounts each serve different purposes. Having access to all three can create flexibility when deciding where retirement income should come from.

Roth conversions may also help reduce future required minimum distributions from traditional accounts.

And if leaving money to children or other heirs is part of your plan, Roth assets can offer favorable income-tax treatment, although inherited Roth accounts still have distribution rules.

These are reasons to explore a conversion, especially when your traditional retirement accounts represent a large portion of your wealth.

When a Roth Conversion May Not Make Sense

A conversion adds taxable income to your return, and that can affect more than your tax bill.

I keep a Rubik’s Cube in my office because it illustrates this beautifully. You change one side of the cube, and several other sides change with it.

The same thing happens in financial planning.

A larger conversion could push some income into a higher tax bracket. It might increase Medicare premiums, affect certain healthcare subsidies, or change eligibility for need-based college financial aid.

You also need to think about when you will use the money. Roth IRAs have rules around qualified withdrawals, including five-year requirements. If you expect to need the converted money soon, those rules deserve attention.

And I am not necessarily a fan of converting every dollar in a traditional retirement account.

There may be good reasons to keep some tax-deferred assets available. Future deductions, medical expenses, and your changing income can all influence which accounts are most useful.

Importantly, completed Roth conversions generally cannot be reversed.

This is why I encourage clients to consider the broader tax picture, not just the potential appeal of tax-free income.

How to Complete a Roth Conversion Before Year-End

Once you have decided that a Roth conversion may make sense, the mechanics are generally straightforward. However, I want you to do the planning before moving the money.

Here’s the process I recommend:

1. Run your numbers first. Work with your financial planner and tax professional to understand how much you can convert and what the tax consequences may be.
2. Decide how much to convert. You don’t have to convert the entire account. Sometimes partial conversions over several years make much more sense than one large conversion.
3. Identify the accounts. Determine which traditional retirement account the money will come from and which Roth account will receive it. If the money is in a 401(k), confirm what your plan allows.
4. Arrange a direct transfer. I strongly prefer a trustee-to-trustee transfer, where the money moves directly between institutions or accounts. The IRS permits certain 60-day rollovers, but I would rather avoid unnecessary paperwork and the possibility of an expensive mistake.
5. Confirm the tax payments. Ask your tax preparer whether the conversion means you should make an estimated tax payment or adjust withholding.
6. Review your beneficiaries. While you are working with these accounts, make sure the beneficiary designations still reflect your wishes.

The Deadline Matters, but the Decision Matters More

A Roth conversion can be a valuable tool, but there is no prize for getting one completed simply because December 31 is approaching.

I want you to understand what you are trying to accomplish, how much tax you will pay, and what this decision means for your future purchasing power and financial flexibility.

Sometimes the answer will be to convert this year. Sometimes it will be to convert a smaller amount. And sometimes the smartest decision is to wait.

The important thing is to make that choice with your eyes open.

If you’re considering a Roth conversion and want help understanding how it fits into your overall financial plan, I invite you to fill out my short questionnaire and see if we’re a good fit to work together.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

• Start with a full-year tax projection so you can see how income, investments, deductions, and potential planning decisions interact.
• Review retirement contributions, charitable giving, employer benefits, upcoming cash needs, and estate documents while there is still time to make changes.
• Involve your financial planner, CPA, and estate planning attorney early when one decision could affect several parts of your financial life.

Why Should You Start Year-End Financial Planning in October?

By December, your CPA may be buried, your estate attorney may be booked, your company’s benefit elections may be closed, your financial planner is already buried, and the charitable gift you thought would take two days may require two weeks.

October gives you something December rarely does: Options.

Year-end financial planning doesn’t mean trying to find clever ways to save taxes before the ball drops in Times Square. Instead, you need to look at what changed this year, what you expect next year, and which decisions still have a deadline attached to them.

Selling an investment may change your tax projection. A large charitable gift may influence which investment you sell or donate. A Roth conversion could affect your tax bracket, Medicare premiums, and available cash. An estate planning decision may require an appraisal, legal documents, and a conversation with the family.

Those pieces take time to coordinate.

I would much rather see the whole picture in October than receive seven unrelated questions during the final week of December. By then, the question often changes from “What makes the most sense?” to “What can we still get done?”

1. What Will Your Full-Year Tax Picture Look Like?

Before making a year-end tax decision, you need a reasonable estimate of your total income and tax exposure.

Start with salary, bonuses, business income, investment income, and any consulting work. Add realized capital gains, real estate transactions, stock option exercises, RSU vesting, and other income that may not show up in an ordinary paycheck. Then look at withholding, estimated payments, deductions, and charitable contributions.

If this year looked different from last year, your old tax assumptions may no longer be useful. Maybe you received a larger bonus, sold a property, exercised stock options, or had an unusually profitable business year. Perhaps your income dropped because you changed jobs, took a sabbatical, or retired.

Income changes require a different approach, whether the change moves your income up or down.

A tax return tells you what already happened. A tax projection gives you time to make decisions.

Once your planner and CPA have a shared set of numbers, you can evaluate whether it makes sense to realize gains, complete a Roth conversion, increase retirement contributions, make a larger charitable gift, or adjust an estimated payment. Recent tax law changes taking effect in 2026 make that projection even more important.

2. Does Your Investment Portfolio Still Fit the Job It Needs to Do?

A year-end investment review should go beyond asking whether the portfolio made money.

I would want to know whether market movements changed your intended allocation, whether one company or industry now represents too much of your wealth, and whether the portfolio still matches what you need the money to do.

This is especially important for executives holding employer stock and real estate investors with a large share of their net worth tied to one market. A holding can be a good investment and still occupy too much of your financial life.

Taxes belong in this conversation too. Look at the capital gains and losses you have already realized. There may be opportunities to sell investments at a loss and offset certain gains, but tax-loss harvesting should support the investment plan rather than drive it.

You also need to consider the IRS wash-sale rules before repurchasing the same or a substantially identical investment. Those rules can become particularly messy when trades occur across multiple brokerage accounts, retirement accounts, or a spouse’s account.

Finally, check what you will need from the portfolio over the next few years. Money intended for tuition next fall, a home purchase, or the first years of retirement has a different job from money that can remain invested for another decade.

3. Are You Using the Retirement Savings Opportunities Available to You?

Review your retirement contributions before the final few payroll cycles of the year.

For 2026, employees can generally contribute up to $24,500 to a 401(k), 403(b), or governmental 457 plan. The general catch-up contribution for people aged 50 and older is $8,000, while people ages 60 through 63 may qualify for a higher $11,250 catch-up contribution.

There is also a new wrinkle for some higher-income employees. Beginning in 2026, employees whose prior-year wages from the employer exceeded $150,000 generally must make catch-up contributions on a Roth basis if the plan allows catch-up contributions.

I would review the following areas.

• Year-to-date employee contributions
• Employer matching contributions
• Catch-up eligibility
• After-tax contributions and in-plan Roth conversions
• IRA or backdoor Roth planning
• SEP IRA, solo 401(k), or other business-owner plans
• Potential Roth conversions from existing retirement accounts

Maximizing every available account is not automatically the right answer. You still need enough cash for taxes, family expenses, and near-term goals. It may also make sense to build different sources of taxable, tax-deferred, and tax-free retirement income rather than sending every available dollar to the same type of account.

4. Could Your Charitable Giving Be More Intentional This Year?

Start with what you want your giving to accomplish. Which organizations matter to you? How much do you want to give? Would you still make the gift if there were no tax deduction?

Once those questions are answered, you can decide how to fund the gift.

Writing a check may be simple, but it may not be the most efficient choice if you own investments that have appreciated significantly. Donating eligible appreciated securities directly may allow you to support the charity without selling the investment first and realizing the gain.

Don’t forget about qualified charitable donations from your IRAs. If you’re over 70.5 years old, you can make a donation directly from your IRA without having to pay taxes on the withdrawal. These donations can be used to satisfy required minimum distributions, and the charity ultimately gets more money because they won’t have to pay taxes on that donation. Win-win.

Some families also group several years of donations into one tax year or contribute to a donor-advised fund. With a donor-advised fund, the sponsoring organization takes legal control of the contribution, while you retain advisory privileges over how grants are distributed to charities.

That can be useful during an unusually high-income year or when you know how much you want to give but have not chosen every organization yet.

These strategies require lead time. A charity may need to verify its brokerage instructions. A donor-advised fund must be established and funded. Privately held assets may require additional documentation or a qualified appraisal.

December 29 is a poor day to begin that process.

5. Do Your Employer Benefits and Equity Compensation Need Attention?

Some of the least flexible year-end decisions arrive through your employer.

Open enrollment is the obvious example. Review health coverage, HSA or flexible spending account elections, disability insurance, life insurance, and dependent care benefits. If you and your spouse both have workplace coverage, look at the options together before making separate elections.

I have seen couples pay for overlapping benefits while leaving a useful option untouched because each person assumed the other had handled it.

Executives may have additional decisions involving deferred compensation, employee stock purchase plans, RSUs, and stock options. Review what vested this year, what may vest next year, and whether any option exercise windows are approaching.

An option exercise can affect your taxes, cash flow, and exposure to employer stock at the same time. A deferred compensation election may influence income years into the future and may be difficult or impossible to change later.

6. Has Your Estate Plan Kept Up With Your Actual Life?

An estate plan can still be legally valid while doing a poor job of reflecting your current wishes.

Review your will, revocable trust, financial power of attorney, health care directive, and beneficiary designations. Confirm that the people named as executor, trustee, guardian, and agent are still the people you want in those roles.

Then look at what has changed.

Did you get married or divorced? Was a child or grandchild born? Did someone named in the documents die? Did you buy property, sell a business, open new accounts, move to another state, or begin providing significant financial support to a family member?

Larger lifetime gifts may require even more coordination. For 2026, the annual federal gift tax exclusion is $19,000 per recipient. Giving more doesn’t necessarily mean you will owe gift tax, but it may create a reporting requirement and use part of your lifetime exemption.

The number alone should not decide how much you give. I would first want to know how the gift affects your own security, what you want it to accomplish, and whether everyone understands what the money represents.

7. What Will Your Family Need Cash for Over the Next Year?

Before increasing retirement contributions, investing extra cash, or making a large gift, look at what the next twelve to eighteen months may require.

That could include tax payments, tuition, a home purchase, renovations, business funding, family support, travel, insurance premiums, or the first year of retirement.

I would rather know in October that you need $200,000 next June than discover it after we have invested the cash, exercised stock options, and funded a large charitable gift.

Add up the known expenses, leave room for the less predictable ones, and decide where the money should come from. That may mean holding more cash, directing an upcoming bonus toward the goal, or identifying investments that can be sold thoughtfully.

If selling investments would create an unwanted tax bill, there may be other ways to access cash, although borrowing against assets introduces its own costs and risks.

Liquidity is what makes the rest of the plan workable. A strategy can look impressive on paper and still be a bad fit if it leaves your family scrambling for cash six months later.

Give the Important Decisions Enough Time

You may review these seven areas and decide that only two require action this year. That is a perfectly good outcome.

You don’t need seven new financial strategies before December 31. You need a clear view of what changed, what’s coming next, and which decisions still have a deadline attached to them.

If your taxes, investments, benefits, charitable plans, and estate decisions have started to feel like separate conversations, Lanning Financial can help you bring them into one financial picture.

Start with our brief questionnaire to tell us a little about your situation and see whether working together may be a good fit.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

• If your income changes, start by figuring out whether this is a temporary disruption or a more permanent change so you can decide whether you need a short-term adjustment or a bigger reset.
• Review your cash flow, benefits, savings, debt, and upcoming large expenses before making major financial decisions from a place of stress.
• A short-term income drop usually doesn’t derail a long-term plan, but it may require pausing, delaying, or reshaping goals until the next chapter becomes clearer.

Your Income Changed. Now What?

Many people are asking some version of this question right now.

I’m making less money. I just took a lower-paying job. I’m out of work. I want to take six months away from work for a project, caregiving, or just to breathe. What does that mean for my financial plan? Am I still going to be okay?

First, breathe.  And keep breathing.

An income change can feel scary, especially when you have been operating from a certain set of assumptions for a long time. But a lower-income period doesn’t automatically mean your plan is broken. Very often, it means the plan needs to be updated.

Recent Federal Reserve research found that 30% of adults had income that varied at least occasionally during the year, and 11% struggled to pay bills because their income varied. Job security was also top of mind, with 42% of adults saying they were worried about finding or keeping work.

So, if income feels less predictable right now, you are not imagining it, and you are not alone. The question is what to do next.

First, Figure Out What Kind of Income Change This Is

Not every income drop requires the same response.

A temporary income drop is one thing. Maybe you lost a job and expect to find another one. Maybe you are taking unpaid leave, your business slowed down for a few months, or you’re intentionally stepping away from work for a season.

A lower-paying but intentional change is another thing. The new job could pay less but give you more flexibility, less stress, more time with your family, or a better version of daily life.

A long-term or permanent income loss is different. Disability, the death of a spouse, a lasting business decline, or a career change that permanently lowers income can have a much bigger impact.

Before you start making cuts or second-guessing everything, name the situation honestly. Is this a chapter, a transition, or a new long-term reality?

The answer shapes the plan.

Short-Term Income Loss Usually Calls for Recalibration, Not Panic

In my experience, a short-term job loss or temporary income decrease is usually not fatal to a long-term financial plan.

You may need to pause a remodel, make the current car work for another few years, rethink the big vacation you were planning, or slow down extra savings temporarily while you get through the transition.

That’s not the same as giving those things up forever.

You are often just moving them to a different year, changing the scope, or giving yourself time to see what happens next.

There is also some data to support the idea that job loss doesn’t always become a permanent setback. The Bureau of Labor Statistics reported that among long-tenured displaced workers who were reemployed full time, 62% had earnings that were as much as or greater than what they earned in their lost job.

Not everyone lands quickly or at the same income. Some people need a deeper reset. But it’s a useful reminder that a disruption isn’t always the end of the story.

Look at What Actually Needs to Change

When income drops, the first instinct is often to look at everything at once. That can get overwhelming very quickly.

Instead, start with the decisions in front of you.

Do you have a major purchase coming up? A remodel? A car? Tuition? Travel? A move? Are you planning to support an adult child or aging parent? Are you counting on income that may not arrive when you expected?

Those are the places to look first.

Some decisions can wait or you can adjust them. Others may still make sense, but not right now.

This is where financial planning can create relief. You don’t have to decide that the remodel is gone forever. You might decide it happens two years from now instead of this year. You don’t have to decide that the vacation is irresponsible. You might decide it needs to look different this time.

The goal is to separate what matters from what is simply scheduled.

Revisit Cash Flow Without Turning It Into Punishment

When your income changes, you need to look at cash flow. But I don’t think that it should feel like punishment.

This is not the moment to beat up on yourself for earning less. Instead, you want to relook at your spending and make sure it aligns with your values.  

Start with what’s coming in now. Then look at what’s going out. Separate fixed expenses from flexible ones. Notice what is essential, what is discretionary, and what can pause for a period of time.

Rather than tell yourself a story about how awful this is, tell yourself a story about how you know how to do hard things, that you are resilient, that you are figuring it out, that this is not permanent, and that ultimately you are doing the best thing for you for today and for 10 years from now.  

Also look at the benefits. If your job changed, did your health insurance change? Did retirement contributions stop? Did stock compensation, bonuses, or employer-paid benefits shift? These details can matter as much as the salary number.

Then look at savings. How long can your cash reserves support this chapter? Do you need to use them? If so, how much and for how long?

Use the Pause to Recheck Your Priorities

Sometimes an income change does more than shift the numbers. It changes the conversation.

We can get on the hamster wheel at work and just keep going. More income, more spending, more commitments, more expectations. Then something interrupts the pattern, and suddenly you have a chance to ask better questions:

• Do I actually want the kitchen remodel right now?
• Do I want the higher-paying job if it means I never see my kids?
• Am I spending in ways that have heart and meaning for me, or am I just keeping up with what I thought I was supposed to do?

A lower income is not a failure. Sometimes it comes with something valuable, like more time, less stress, more creative freedom, or a life that feels more aligned.

Run the Numbers Before You Assume You Are Off Track

This is where a financial plan becomes really helpful.

If you are already working with a financial planner, that person should be able to update your plan with the new income assumption and show you the impact. What happens if you make less for six months? What happens if the lower income lasts two years? What happens if you save less temporarily but restart later?

There are answers to these questions.

Sometimes clients come in worried that everything has changed, and when we run the numbers, the answer is much more manageable than they feared. Maybe retirement still works, but the big goal needs to move back a little. Or one choice needs to change, but the whole plan does not.

Seeing the impact in your own numbers can create a lot of relief.

It also helps couples and families talk about the situation with less blame and more context. When everyone is guessing, tension can rise quickly. When the numbers are visible, the conversation becomes more grounded.

When an Income Change Needs a Bigger Plan

There are times when an income change deserves more than a temporary adjustment.

If the lower income is likely to be permanent, the plan needs to reflect that. If the change involves disability, the death of a spouse, divorce, extended unemployment, loss of benefits, or ongoing family support obligations, it is worth taking a deeper look.

The same is true if the income change is creating conflict at home. Money stress can bring out very different fears in different people. One person may want to cut everything immediately. Another may want to keep life feeling normal for as long as possible.

Neither reaction is unusual, but it helps to have a shared view of the facts.

A bigger plan may include adjusting spending, changing savings targets, revisiting insurance, rethinking retirement timing, evaluating debt, or deciding which goals still fit the life you want now.

This Is a Chapter, Not the Whole Story

An income drop can feel unsettling because it challenges the plan you thought you were living inside. But a change in income doesn’t automatically mean you are off track.

Sometimes it means you need to pause. Other times it means you need to delay a few things or redefine what success looks like in this season of life.

When you can look at the numbers, understand the tradeoffs, and make decisions from clarity instead of fear, the situation usually feels much more manageable.

If your income has changed and you want help understanding what it means for your financial plan, I invite you to start with my short questionnaire. It is a simple way to share what has shifted and see whether working together could help you move forward with more clarity and confidence.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

• You can access cash without selling investments by using strategies like a securities-backed line of credit, which lets you borrow against eligible assets in a taxable investment account.
• This approach can help you avoid triggering capital gains, selling at the wrong time, or disrupting a portfolio you still want to hold.
• Borrowing against investments can be useful for short-term cash needs, but it should have a clear purpose, repayment plan, and understanding of the risks.

When You Need Cash but Don’t Want to Sell

Sometimes you need cash, but selling investments doesn’t feel like the right move.

Maybe you are buying a car, starting a home project, covering a tax bill, or bridging a temporary cash-flow gap. You have money invested, but you don’t necessarily want to sell those investments just because you need access to cash right now.

Selling investments can create taxes. It can disrupt a portfolio. It can also force you to sell something you still want to own, possibly at a time when you would rather leave it alone.

That’s why many people want to know if there’s another way to access cash without disrupting the rest of the plan. One option is a securities-backed line of credit, often called an SBLOC.

What Is a Securities-Backed Line of Credit

A securities-backed line of credit is a line of credit secured by assets in a non-retirement investment account. FINRA describes it as a revolving line of credit that lets you borrow money using securities in your investment account as collateral.

Think of it a little like a home equity line of credit, or HELOC. With a HELOC, you are borrowing against the equity in your house. With an SBLOC, you are borrowing against eligible securities in an investment account.

You are not selling the investments. You are borrowing against them.

The amount you can borrow is based on the value of the account and the type of investments inside it. A portfolio with more conservative holdings may support a different borrowing amount than one with more volatile or concentrated positions. The interest rate and terms can also vary depending on the institution, the size of the line, and the amount borrowed.

These lines are generally tied to taxable brokerage accounts, not retirement accounts. That distinction matters because retirement accounts have their own rules and limitations.

Why Someone Might Use an SBLOC Instead of Selling Investments

The biggest reason people consider an SBLOC is because they need cash, but they don’t want to sell.

Let’s say you need $50,000 to buy a car. You could sell investments to raise the cash. But maybe those investments have appreciated, and selling them would trigger capital gains. Maybe you own a stock you still believe in. Maybe the market is down, and selling right now feels poorly timed.

I can already hear the Apple and Nvidia people saying, “Sell my stock to buy a car? Absolutely not.”

That’s where an SBLOC can be useful. It may allow you to borrow against the value of the account, use the cash for the expense, and keep the investments in place.

This can be especially helpful when the need is temporary. Maybe you are waiting for a bonus, selling another asset, receiving income later in the year, or trying to manage cash flow without creating a tax event.

In the right situation, an SBLOC can act almost like a backup reserve. However, it’s not your emergency fund, and it shouldn’t replace thoughtful cash planning. But it can be another source of liquidity if you need access to money quickly and do not want to sell investments immediately.

When an SBLOC Can Make Sense

An SBLOC is usually best as a short-term or strategic cash-flow tool.

It may make sense for things like:

• Buying a car
• Covering a temporary tax bill
• Funding part of a home improvement project
• Bridging cash flow before a bonus or liquidity event
• Avoiding a poorly timed investment sale
• Managing expenses during a transition

The key word here is temporary.

I don’t like the idea of using an SBLOC to support ongoing lifestyle spending with no repayment plan. That’s where this can move from strategic to sloppy very quickly.

Debt is not automatically bad. A lot of financial planning is debt management. It’s not only investment management and tax planning. It’s also deciding when borrowing helps your overall financial life and when it adds pressure you don’t need.

An SBLOC can be a very helpful tool when it solves a specific problem and there is a clear plan for paying it down.

The Risks of Borrowing Against Your Investments

This is the part you need to understand before using one.

An SBLOC is convenient, but it’s still debt. The fact that it is tied to your investment account doesn’t make it free money.

The biggest risk is that the value of your investments can fall. If the account drops too much, the lender may require you to add collateral, repay part of the loan, or sell securities to reduce the balance. This can affect your long-term investment goals.

That’s why you generally don’t want to borrow the maximum amount available. Just because the institution will lend you a certain amount doesn’t mean that is the right amount to use.

There is also the issue of interest. Some lines may allow interest to accrue or require interest-only payments. That can feel easy in the short term, but if you are not paying the balance down, the loan can grow over time.

Interest rates may also change. Many lines of credit use variable rates, which means the cost of borrowing can rise.

SBLOC vs. HELOC vs. Selling Investments

An SBLOC is not the only way to access cash. It is one tool among several, and the right choice depends on why you need the money, how long you need it, and what kind of risk you are comfortable taking.

When You Should Probably Not Use an SBLOC

There are times when I would be very careful with this strategy.

I would be cautious if you don’t have a clear repayment plan. I would also be cautious if the borrowing is really covering an ongoing spending problem, not a temporary need.

It may not be a good fit if your portfolio is highly concentrated, very volatile, or already taking more risk than you are comfortable with. If a market drop would force you into a decision you don’t want to make, that matters.

I would also pause if the expense itself is not aligned with your broader plan. Borrowing against investments to buy flexibility or solve a short-term cash-flow issue can be very different from borrowing because you don’t want to make a harder spending decision.

Sometimes selling investments is the better answer. Other times using cash is better. And sometimes borrowing is appropriate. The point is to choose intentionally.

Questions to Ask Before Opening or Using an SBLOC

Before you use a securities-backed line of credit, ask yourself:

• What is the cash for?
• Is this a short-term need or an ongoing expense?
• How much can I borrow without pushing the line too hard?
• What is the interest rate, and can it change?
• What happens if the market drops?
• What is my repayment plan?
• Would selling some investments actually be simpler?
• How does this affect my taxes, debt, and long-term plan?

How a Financial Planner Helps You Decide

This is where planning becomes important. The decision is not just whether an SBLOC is available, but whether using one improves your financial life.

A planner can help you compare selling versus borrowing, look at the potential tax impact, evaluate concentration risk, think through repayment, and decide how much liquidity you really need. A planner can also help you see whether this is a short-term cash-flow tool or a sign that something else in the plan needs attention.

That’s the bigger conversation.

You are not just trying to get cash. You are trying to manage your money in a way that supports your life now and protects your options later.

Liquidity Is Helpful When It Has a Plan

A securities-backed line of credit can be a useful tool. It can help you access cash without selling investments, avoid a poorly timed sale, and manage short-term cash-flow needs more strategically. But it needs guardrails.

It should have a clear purpose and a repayment plan. It should also fit into the rest of your financial picture, including your taxes, investments, debt, and long-term goals.

Use it thoughtfully, and an SBLOC can give you more flexibility. Otherwise, it can create risk you didn’t intend to take.

If you are trying to decide whether to sell investments, borrow against them, or create a better liquidity strategy, I invite you to start with my short questionnaire. It is a simple way to share what you are thinking through and see whether working together could help you move forward with more clarity and confidence.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

• Plan a home improvement project by understanding the full cost, timeline, and disruption before you start, not just the design and contractor bid.
• Decide how much to spend and how to pay for it based on how long you will stay, what the project improves, and how it fits your larger financial life.
• The projects that feel best long term are the ones that balance lifestyle upgrades with clear tradeoffs, not just the ones that look good when they are done.

What to Think Through Before You Start a Home Improvement Project

Home improvement projects often look simpler at the beginning than they feel once you are in them. Before you focus on finishes, fixtures, and bids, it helps to think through the practical realities, the financial tradeoffs, and how this project will fit into your life.

Check the Rules Before You Fall in Love With the Project

Before you get too attached to the vision, make sure you understand what approvals or permits may be required. That can include your homeowners association, city, county, or state, depending on the scope of the work.

If the project involves structural changes, electrical, plumbing, added square footage, or anything visible from the outside, there is a good chance someone needs to sign off on it.

This feels boring until it derails the timeline. It’s much easier to find out what is required at the beginning than to discover halfway through the project that something needs to be redone, paused, or approved after the fact.

Decide How Long You Really Plan to Stay

How long you expect to live in the house should shape how you think about the project. If you’re only going to be there another few years, it’s worth asking whether you need to be the one doing the remodel or whether a future buyer can take that on instead.

If this is a house you plan to stay in for another 20 or 30 years, the thinking changes. That’s when it can make sense to spend more on quality, choose materials that will last, and consider upgrades that will help the house support you longer.

If you’re already opening walls and reworking spaces, it may also be the right time to think about accessibility features or aging-in-place improvements you will be glad you added later.

Be Honest About the Management Burden

Even with a great architect or contractor, you are still going to have to drive the bus. You will be making decisions, answering questions, solving problems, approving changes, and staying in communication with multiple people while the work is underway.

If you are good at juggling moving parts, that may feel manageable. If you’ve never done this before or don’t enjoy coordinating people and details, it helps to be honest about that upfront.

A remodel usually goes better when you work with people you trust and communicate with well, because things will come up. Some parts will go smoothly, some will go sideways, and your ability to work through both matters a lot.

Prepare for Dust, Disruption, and Decision Fatigue

A remodel affects how you live while the work is happening. If you’re redoing a kitchen, there’s a good chance you will be washing dishes in a bathroom sink or bathtub for a while. If the work is indoors, you’re going to live with dust, noise, delays, and the exhaustion of making one more decision than you wanted to make that day.

That doesn’t mean the project is a bad idea. It just means the day-to-day experience is harder than many people expect. Thinking about that ahead of time helps you plan better and react less when the inconvenience starts to feel very real.

Build More Room Into the Budget and Timeline Than You Think You Need

Almost every substantial home improvement project costs more and takes longer than people expect. That’s because once the work begins, new information shows up, timelines shift, and the project starts affecting more of the house than you originally planned.

Add More Money Than the Bid Suggests

For a substantial project, the general rule of thumb is to add another 20% to the bid, even if the estimate already seems to include contingency. This is a calculation for your brain, not your contractor’s. A project that starts at $100,000 should be treated like a $120,000 project when deciding whether you can financially move forward.

That extra room is not pessimism. It gives you space for changes, upgrades, and the things that show up once walls get opened. It spares you a nasty surprise later, and if it comes in at budget, hey, you’ve “saved” money.

Add More Time Than the Contractor Promises

The same logic applies to the timeline. If the project is more than a small, contained upgrade, assume it will take longer than you hope. We often tell clients to add six months to substantial projects because delays are normal.

Sometimes the issue is a material delay. Sometimes someone gets sick. Sometimes the work uncovers a problem that has to be fixed before anything else can move forward. If the project finishes early, great. If it doesn’t, you’ll be much less rattled because you planned for reality instead of best-case timing.

Expect Surprises Behind the Walls

This is where many cost overruns begin. Once the drywall comes off, you may find that the electrical needs to be redone, the plumbing is outdated, there is water damage, termites, or some other issue no one could fully see from the outside.

These surprises are frustrating, but they are also common. That’s exactly why budget and timeline cushions matter. You are not doing anything wrong if the project reveals new work. You are just dealing with the fact that older homes often hold surprises until someone starts opening things up.

Budget for the Soft Costs Too

The hard construction costs are only part of the story. Once the project is finished, people often discover there are other expenses they didn’t account for. Maybe the old furniture no longer fits the room. Maybe the curtains look wrong now. Maybe the project makes the rest of the space feel dated, and suddenly a simple remodel pulls in styling and furnishing decisions too.

Insurance can shift as well. If you add square footage, install a hot tub, or make other major improvements, your homeowner’s insurance premium may go up. You may also need to notify your insurer while construction is underway to make sure coverage is appropriate during the remodel.

These are not reasons to avoid the project, but they are reasons to build more room into the plan than the original bid suggests.

How Much Should You Spend on a Remodel

This is usually a Goldilocks question. You don’t want to spend so little that the project feels unfinished or short-lived, and you don’t want to spend so much that it creates regret later. The right number is the one that feels good both in the finished result and in your finances.

Work Backward From a Realistic Range

Start by gathering real numbers before you decide what feels reasonable. Look at appliances, materials, labor, design costs, and the level of finish you want. A kitchen, for example, might cost far less or far more than you first imagined, depending on the choices you make.

That research gives you a range. Once you can see the low end, the high end, and the middle, you are in a much better position to decide what budget feels worth it for you.

Make It a Goldilocks Decision

The right budget isn’t a universal number. It’s a personal one. Think of this as a Goldilocks decision because it has to feel just right.

That means the amount should feel good not only when you look at the finished room, but also when you look at your savings, debt, and long-term plans. A remodel can be beautiful and still feel financially off. The goal is to find the point where the project improves your life without creating a financial hangover afterward.

Spending More Can Be Worth It If It Buys Quality

There are times when spending more is the better decision, especially if it gets you higher-quality materials, appliances, or workmanship that will last longer. If you can afford to move up within your range and it means you are less likely to redo the project in five or ten years, that can be money well spent.

The point is to think carefully about where quality matters and where cutting corners may cost you later.

Add Future-Friendly Upgrades

If you are already opening up walls or reworking a space, it may be worth thinking a little further ahead. A bathroom remodel, for example, might be the right time to add a bench in the shower, blocking for grab bars, or other accessibility features that let you stay in the home longer and more comfortably.

These choices may not feel urgent today, but they are often much easier and cheaper to do during the remodel than to retrofit later.

Paying Cash vs. Borrowing for Home Improvements

How you pay for a remodel matters almost as much as the project itself. The right answer depends on the size of the project, the kind of improvement you are making, and how this choice affects the rest of your finances.

When Paying Cash Makes Sense

Paying cash is usually the cleanest option, especially for smaller projects or projects you have already saved for. People are sometimes comfortable with cash for projects under about $50,000, because once the work is done, the bill is done too.

Cash also works well when the project is more about comfort or aesthetics than a major structural improvement. If you are updating finishes, replacing furniture, or doing a project you simply want to enjoy, paying cash can keep the decision simple and avoid turning a home upgrade into long-term debt.

When a HELOC or Cash-Out Refinance May Make More Sense

Borrowing can make more sense when the project is substantial, especially if you are adding square footage or making a major improvement to the property. In those cases, a HELOC or cash-out refinance may be worth considering.

A HELOC is often more flexible because you can draw only what you need, and if the loan is secured by your main home or second home and the money is used to buy, build, or substantially improve that home, the interest may qualify as deductible mortgage interest, subject to the normal mortgage-interest limits. 

Talk to Your Tax Professional Before Assuming the Interest Is Deductible

This is one place where details really matter. Interest on a HELOC or home equity loan is not automatically deductible just because the loan is secured by your house. Under current IRS rules, the borrowed funds generally have to be used to buy, build, or substantially improve the home that secures the loan, and you only get the mortgage-interest deduction if you itemize.

That’s why it’s worth talking to your tax professional before assuming the deduction will apply. A bathroom or kitchen remodel may qualify. New drapes, wallpaper, or repainting generally will not. 

For post-2017 acquisition debt, the limit is generally $750,000 total across your main home and second home, or $375,000 if married filing separately.

What to Know Before Using Zero-Percent Financing or Credit Cards

Promotional financing can work, but only if you treat it like a short-term tool and not free-floating extra spending. If a vendor offers zero-percent financing on a purchase, the most important question is whether you have a real payoff plan before the promotional period ends.

You also want to read the fine print carefully. Some of these offers come with fees, deferred interest, or terms that become expensive quickly if the balance is not paid off on time. 

When used carefully, these financial tools can be helpful. Used casually, they can make a home project cost far more than expected.

Borrowing Against a Brokerage Account

For some households, a securities-backed line of credit can be another option. This lets you borrow against a taxable investment account instead of selling assets or borrowing against the house.

The upside is that rates can sometimes be competitive and you may avoid triggering capital gains by selling investments. The downside is that the loan is backed by securities, which means market declines can create pressure to add cash or reduce the balance. This is not inherently a bad option, but it requires a clear repayment plan and a solid understanding of the risks.

Will a Home Improvement Project Add Value to Your Home

If you are about to spend a meaningful amount of money, it’s natural to want to know whether you will get that value back.

The honest answer is that most remodels don’t return dollar-for-dollar value, especially over time. If you spend $200,000 on a project, you shouldn’t assume your home is now worth $200,000 more. Some improvements come close, particularly when you’re adding square footage or making major structural upgrades, but many projects fall somewhere short of that.

Part of the reason is timing. A brand-new kitchen may feel like a huge upgrade today, but in 15 or 20 years, it may feel dated to the next buyer. While your home may appreciate overall, specific improvements don’t always hold their value in the same way.

It’s also worth separating two different goals. One is increasing the resale value of your home. The other is improving how you live in it. Those are not always the same thing. You might add something that brings a lot of enjoyment to your daily life but does very little to change how an appraiser values the property.

If resale value is your primary concern, a local real estate agent is usually the best person to ask. They can give you a clearer sense of what buyers in your area value and what types of improvements tend to matter in your market.

How to Make a Remodel Decision You Feel Good About

When you step back from the details, this decision becomes simpler. You are not just deciding whether to remodel. You are deciding how this project fits into your life, your finances, and what you want next.

If you are feeling stuck, walk through this:

• Clarify the goal. Decide whether you want to improve function, stay longer, increase value, or solve a daily frustration.
• Calculate the full cost. Include the extra 20%, time overruns, soft costs, and disruption.
• Confirm your timeline. Be honest about how long you plan to stay and whether the project still makes sense in that context.
• Choose the funding method. Decide whether cash, borrowing, or a mix of both fits your broader financial plan.
• Compare the alternatives. Consider what else this money could do, whether that is investing, traveling, moving, or preserving flexibility.
• Check your conviction. Make sure the project feels right both in the finished space and in the way you are paying for it.

Home Improvement Planning Is Really Life Planning

The most satisfying projects tend to come from clarity, not momentum. When you understand why you’re doing the work, what it will realistically cost, and how it fits into your broader financial picture, the decision becomes easier to stand behind.

You don’t need to get every detail perfect. You just need to make a decision that feels aligned both with your day-to-day life and your long-term plans.

If you’re thinking through a remodel and want help pressure-testing the numbers, the tradeoffs, or how this fits into your bigger financial picture, you can start with my short questionnaire. It’s a simple way to share what you’re considering and see whether working together could help you move forward with more clarity and confidence.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

• Help one child financially only when you can clearly explain why the help is needed, what it is meant to do, and how it fits your family values.
• Treat fairness as context, not math. One child may need more help, but you should be able to explain that decision calmly and stand behind it.
• Set boundaries before any money moves. Define the amount, the purpose, and the expectations so support doesn’t create confusion, dependence, or sibling tension.

The Part Nobody Tells You About Helping Adult Kids

Helping an adult child financially is rarely just about money. On the surface, it may look like a gift, a loan, or a one-time offer of support. Underneath, it often carries much bigger questions about fairness, responsibility, guilt, and what this help might mean for the rest of the family.

It’s also far more common than many parents realize. Pew Research found that about six in ten parents of young adults ages 18 to 34 said they had helped their children financially in the past year, which helps explain why so many families find themselves navigating these decisions without a clear script for how to do it well.

What makes this especially hard is that parents are usually trying to solve two problems at once. They want to help the child in front of them and they also want to protect the relationships around them. 

That can create real tension, especially when one child needs more help than another or when circumstances are very different from one sibling to the next.

Fair Doesn’t Always Mean Equal

Parents often want to treat their children equally because it feels fair, safe, and easier to explain. But real life rarely unfolds in equal ways.

One child may need help with a home purchase while another is more financially secure. One may be raising children, navigating a divorce, or rebuilding after a setback, while another simply doesn’t need the same level of support.

That doesn’t automatically make the help unfair. Fairness asks a deeper question than “Did everyone get the same amount?” It asks whether your decisions reflect the realities of each child’s life, your own values, and the bigger picture of your family. 

In some cases, equal support makes sense. In others, trying to force equality can actually ignore the very real differences in need, timing, and circumstance.

What matters most is being intentional. If you are helping one child more than another, it helps to understand why, how you want to handle that over time, and whether you want to address it later through estate planning or open family conversations. The goal is to make decisions you can stand behind with clarity, generosity, and as little confusion as possible.

Ask These 4 Questions Before You Say Yes

Before you offer financial help, it’s worth slowing the decision down. The right support can create stability and strengthen trust. The wrong kind can create confusion, dependence, or strain within the family.

Do I Trust This Child to Use the Money as Intended?

If you’re helping with a down payment, debt payoff, or short-term transition, ask whether the purpose is realistic and whether your child is likely to follow through. If not, the answer may not be no, but it may need to look different, such as paying a bill directly or setting clearer limits.

Will This Support Build Stability or Create Dependence?

Some help acts as a bridge. Other help quietly becomes a pattern. The key question is whether this support helps your child move toward greater stability or keeps both of you stuck in the same cycle.

Can I Afford to Do This Without Compromising My Own Plan?

Wanting to help is not the same as being able to help safely. Before you say yes, look honestly at what this would mean for your retirement, cash reserves, and future flexibility. A good decision has to work for both generations.

If My Other Children Found Out, Could I Explain This Calmly and Clearly?

This question often reveals whether the decision feels grounded or reactive. You don’t have to share every financial choice with the whole family, but if one child is receiving meaningfully different support, you should be clear with yourself about why and how you want to handle that over time.

Put Guardrails Around the Help

Generosity works better when it has structure around it. A few clear guardrails can protect the relationship, reduce confusion, and make it easier for everyone to understand what this support is meant to do:

• Decide whether the money is a gift or a loan so there is no confusion later. If it is a gift, remember that the IRS annual gift tax exclusion is $19,000 per recipient in 2026, and larger gifts may require filing Form 709.
• Be specific about the purpose, whether it is for a down payment, debt payoff, rent, or a temporary transition.
• Set a clear amount instead of leaving the door open to ongoing requests.
• Define whether this is one-time help or part of a broader family plan.
• Put the agreement in writing if the amount is significant or if expectations could become fuzzy over time.
• Think through how this fits with your other children, especially if fairness may become a concern later.
• Make sure the help still works within your own financial plan so generosity does not create stress for you down the road.

Should You Tell the Other Siblings?

There is no one right answer here, but silence is not always the safest option. When one child receives meaningful financial help and the rest of the family learns about it later, the surprise itself can create more tension than the money.

That doesn’t mean every gift or decision needs to be announced in real time. However, you should think carefully about whether this support could affect sibling relationships, future expectations, or how your estate is understood later on.

In some families, a calm conversation creates clarity and prevents unnecessary resentment. In others, the better choice may be to document the decision privately and account for it later through your estate plan. 

What matters most is that you are being intentional. If your choice would be hard to explain later, that is often a sign you need to think it through a bit more now.

The Kind of Help I’d Be Most Careful With

The help I’d be most careful with is the kind that has no clear endpoint. A one-time gift for a specific purpose is usually much easier to evaluate than support that slowly turns into an ongoing expectation. When the help becomes open-ended, it can blur the line between generosity and dependence, and that is where relationships often start to strain.

I’d also be cautious anytime the money is meant to relieve pressure without addressing the underlying issue. Paying off credit card debt, covering repeated shortfalls, or stepping in again and again can feel helpful in the moment, but it may only delay a harder conversation about spending, planning, or stability.

That doesn’t mean you should never help in those situations, but the form of help matters. 

The more ongoing, emotional, or unclear the situation is, the more important it becomes to slow down, set boundaries, and make sure your support is moving things forward.

Don’t Turn Your Family Into a Spreadsheet

It helps to think carefully about fairness, timing, and long-term impact, but not every family decision can be reduced to a perfectly balanced formula. 

Real life is messier than that. Children have different needs, different capacities, and different seasons of life, and sometimes the most loving decision doesn’t look mathematically equal.

The goal is to make decisions you can explain to yourself and, when needed, to the people you love. That means holding onto both structure and humanity. You can have thoughtful guardrails, clear documentation, and an estate plan that reflects your intentions without stripping the relationship out of the equation.

Money decisions inside a family are rarely just financial. They carry history, emotion, hope, and sometimes grief. The more you can approach them with clarity and compassion at the same time, the more likely you are to help in a way that feels supportive rather than divisive.

Thoughtful Help Matters More Than Equal Help

Helping an adult child financially can be a deeply loving choice. It can also bring up questions about fairness, boundaries, and what this decision means for the rest of the family. 

When you slow the decision down, ask better questions, and put clear guardrails around the help, generosity becomes much easier to live with. You don’t need a perfect formula, just enough clarity to know why you are doing it, what problem the money is solving, and how this choice fits into the bigger picture of your family.If you want help thinking through a family money decision like this, I invite you to fill out my short questionnaire. It is a simple way to share what is going on and see whether working together could help you move forward with more clarity and confidence.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

• Several tax provisions connected to the Tax Cuts and Jobs Act were expected to expire after 2025, but new legislation changed the timeline and introduced additional rules beginning in 2026.
• Key updates include inflation-adjusted tax brackets, a higher standard deduction, new charitable deduction rules, and updated reporting thresholds that may affect how income is taxed and reported.
• Planning ahead by timing income, reviewing estate strategies, and coordinating with your CPA can help you use the current rules more effectively before future tax changes reduce flexibility.

What the TCJA Sunset Originally Meant

When the Tax Cuts and Jobs Act (TCJA) was passed in 2017, many of its provisions for individuals were written with an expiration date. The law lowered tax rates and expanded several deductions, but those changes were designed to last only through the end of 2025 unless Congress acted to extend them.

Because of that built-in expiration, tax professionals and financial planners spent years preparing for the possibility that the tax code would revert to older rules in 2026. For households and business owners, that potential shift created a window where planning ahead could significantly affect long-term tax outcomes.

The Original 2026 Expiration Timeline

Under the original TCJA framework, several major provisions were scheduled to expire after December 31, 2025. If nothing had changed, the tax system in 2026 would have looked very different.

Key provisions that were originally set to sunset included:

• Lower individual income tax rates, which would have reverted to higher pre-2018 levels.
• The larger standard deduction, which would have dropped roughly in half.
• The expanded child tax credit, which would have been reduced and subject to different eligibility rules.
• The 20% Qualified Business Income (QBI) deduction for many business owners would have disappeared.
• The historically high estate and gift tax exemption would have fallen significantly.

What Changed With The 2025 Tax Law

For several years, the tax planning conversation centered around would happen when the Tax Cuts and Jobs Act provisions expired after 2025.

In 2025, lawmakers revisited those provisions as part of a new tax package that reshaped the timeline for many TCJA rules. Instead of allowing the entire framework to expire, Congress extended or made permanent several of the most widely used provisions affecting individual taxpayers and business owners.

That change removed the immediate “tax cliff” many planners had been anticipating. However, the updated legislation also introduced new provisions and adjustments that begin taking effect in 2026 and beyond.

The Tax Changes Taking Effect In 2026

Even though many TCJA provisions were extended or made permanent, several important tax rules still evolve beginning in 2026. Some changes are the result of annual inflation adjustments, while others come from updates introduced in the 2025 tax legislation.

Understanding these shifts helps you anticipate how your tax situation may change and where planning ahead can still create meaningful opportunities.

Updated Tax Brackets And Standard Deduction

For the 2026 tax year, the IRS increased the standard deduction to account for inflation:

• $32,200 for married couples filing jointly
• $16,100 for single filers
• $24,150 for heads of household

The tax brackets themselves remain the same structure created under the Tax Cuts and Jobs Act, but the income ranges for each bracket shift upward each year with inflation.

For many households, this means a slightly larger portion of income may remain in lower marginal tax brackets. Even so, income timing decisions such as bonuses, equity compensation, or Roth conversions can still affect how much of your income falls into higher rates.

Higher State and Local Tax (SALT) Deduction

One of the most noticeable changes affecting taxpayers in 2026 is the expansion of the federal deduction for state and local taxes (SALT). Under prior law, taxpayers who itemized deductions were limited to deducting only $10,000 of combined state income taxes, property taxes, and certain other local taxes.

Beginning in 2025, and continuing into 2026, that cap was increased significantly to $40,000 in 2025 and $40,400 for 2026. This change is a relief for taxpayers in higher-tax states like California or for homeowners with substantial property tax bills, as it allows a larger portion of those taxes to be deducted when itemizing.

Unfortunately, the benefit begins to phase out at approximately $505,000 of modified adjusted gross income (MAGI). For taxpayers above that threshold, the allowable SALT deduction is reduced by 30 cents for every dollar of income above the limit, until it reaches the minimum deduction of $10,000.

Because the expanded deduction phases out at higher income levels, tax planning around income timing may become more important. Taxpayers near the phase-out threshold may benefit from strategies that manage or defer income in a given year, such as retirement plan contributions, timing of capital gains, or coordinating the exercise of stock options. 

In some cases, spreading income across multiple tax years may help preserve more of the SALT deduction. As always, the potential benefit of these strategies should be weighed against broader financial and tax planning goals.

Estate And Gift Tax Exemption Changes

The federal estate and gift tax exemption also increased in 2026. The amount individuals can transfer during life or at death without federal estate tax is now $15 million per person, or $30 million for married couples with proper planning.

While this exemption makes federal estate tax a non-issue for most households, it still plays an important role in planning for families with significant assets, business ownership, or concentrated real estate holdings. It’s also important to remember that state estate or inheritance taxes may apply at much lower thresholds depending on where you live.

New Charitable Deduction Rules

Beginning in 2026, charitable deduction rules become slightly more restrictive for taxpayers who itemize. A 0.5% of adjusted gross income floor now applies, meaning charitable donations are only deductible to the extent they exceed that threshold.

At the same time, a new deduction allows taxpayers who do not itemize to deduct a limited amount of charitable contributions. Non-itemizers may now deduct up to $1,000 for single filers or $2,000 for married couples filing jointly.

These changes may influence how donors approach strategies such as bunching donations or timing larger gifts.

Changes To 1099 Reporting Rules

Starting in 2026, the reporting threshold for payments made to independent contractors increases. Businesses now issue Form 1099-NEC or 1099-MISC only when payments exceed $2,000, up from the previous $600 threshold.

This change mainly affects freelancers, consultants, and individuals with side income. However, it’s important to remember that all taxable income must still be reported, even if a 1099 form is not issued.

Temporary Tax Deductions That Won’t Last Forever

Alongside the broader tax law changes, the 2025 legislation introduced several new deductions that are temporary. Most of these provisions apply from 2025 through 2028, which means they create a limited planning window.

These deductions are tied to specific types of income or expenses, which is why taxpayers who qualify can benefit from understanding how they work before they expire.

Deduction For Tips

Workers who receive tips in traditionally tipped industries may deduct the maximum of $25,000 of qualified tip income per year from federal taxable income.

This deduction starts to phase out for taxpayers whose modified adjusted gross income exceeds:

• $150,000 for single filers
• $300,000 for married couples filing jointly

Tips must still be properly reported to employers, and payroll taxes may still apply.

Deduction For Overtime Pay

Employees may deduct up to $12,500 of qualified overtime income or $25,000 for married couples who file together.

Like the tip deduction, this benefit phases out once income exceeds:

• $150,000 for single filers
• $300,000 for married couples

The deduction only applies to the overtime premium portion of pay, not the full overtime wage.

Car Loan Interest Deduction

Taxpayers can deduct up to $10,000 per year of interest paid on qualifying auto loans.

Key rules include:

• The purchased vehicle must be new and assembled in the United States
• The deduction phases out for higher incomes
• The vehicle must be purchased for personal use

Because auto loan rates have increased in recent years, this deduction may provide meaningful relief for buyers financing a vehicle.

Additional Senior Deduction

Taxpayers age 65 and older can claim an additional deduction of $6,000 per person. The deduction gradually phases out when modified adjusted gross income rises above:

• $75,000 for single filers
• $150,000 for married couples

The deduction is available whether taxpayers itemize or take the standard deduction, which makes it broadly accessible for retirees.

Planning Strategies To Consider Before Rules Tighten

Tax law changes create planning windows. The years before the rules shift are often when you can make the most effective decisions, especially when it comes to income timing, charitable giving, and estate planning. 

Here’s what you can do:

Consider Timing Income And Deductions

If you expect tax rates to rise in future years, it may make sense to recognize income sooner, such as realizing capital gains, exercising stock options, or completing Roth conversions while rates are lower. In other situations, accelerating deductions into the current year can help reduce taxable income.

These decisions depend heavily on your broader financial picture, but thoughtful timing can help you take advantage of the current rules before they change.

Revisit Charitable Giving Strategies

Some households benefit from combining several years of donations into one year to exceed the standard deduction and receive a larger tax benefit. Others may consider donating appreciated securities instead of cash, which can avoid capital gains tax while still allowing a full charitable deduction.

Charitable giving can support causes you care about while also playing a role in tax planning when structured thoughtfully.

Review Your Estate Plan

The estate and gift tax exemption remains historically high, but it is scheduled to drop significantly unless future legislation changes it again.

That makes the current environment an important window for families with larger estates to revisit their planning. Strategies such as lifetime gifting, trust planning, or family transfers may allow you to use today’s higher exemption levels before they potentially shrink.

Even if your estate is well below current thresholds, reviewing beneficiary designations and overall estate documents periodically is still a good practice.

Coordinate With Your CPA Early

Many of the most effective tax strategies require planning before the end of the year, not after. Waiting until tax season often limits what can still be adjusted.

Working with your CPA or financial planner early in the year allows time to evaluate options such as income timing, retirement contributions, charitable planning, and estate strategies while they can still make a difference.

Tax laws will always evolve. Coordinating with professionals before deadlines approach gives you the best chance to make the rules work in your favor.

Tax Rules Change, but Good Planning Doesn’t

Tax laws evolve constantly. Rates adjust, deductions come and go, and new provisions appear while others quietly expire. What matters most isn’t predicting every change but building a strategy that adapts as the rules shift.

The changes taking effect in 2026 highlight that planning ahead creates options. Whether it’s timing income, structuring charitable giving, reviewing your estate plan, or taking advantage of temporary deductions, thoughtful planning can help you reduce taxes while keeping your broader financial goals intact.

The earlier you start those conversations, the more flexibility you usually have.

If you want help understanding how these tax changes may affect your situation, I invite you to start with my short questionnaire. It’s a simple way to share a bit about your financial picture and see whether working together could help you make smarter tax decisions in the years ahead.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

• In midlife, money grief often surfaces because the gap between expectations and reality becomes harder to ignore, especially around time, security, and future choices.
• Many women carry financial grief tied to caregiving, career pauses, relationship changes, and paths not taken, even when those choices were thoughtful and necessary.
• As timelines feel more fixed, comparison and self-blame can intensify, turning normal financial complexity into anxiety and grief rather than clarity.

Why Money Feels Different in Midlife

Money is one of the biggest sources of stress for Americans. In addition, for many women, money starts to feel heavier in midlife, even if nothing dramatic has changed on paper. 

Earlier in life, finances often come with a sense of possibility. There’s time to course-correct, rebuild, or assume things will work themselves out. In midlife, the horizon feels closer, and financial decisions carry more weight because the trade-offs are clearer.

By this stage, money is no longer just about growth or accumulation. It’s tied to real responsibilities, such as caring for children, supporting aging parents, managing health changes, or navigating shifts in career or partnership. The choices you make now feel more permanent, which can amplify anxiety and self-doubt.

There’s also a growing awareness of time. Compounding, retirement timelines, and long-term security feel more concrete, and the gap between where you are and where you thought you’d be can become harder to ignore. 

That awareness doesn’t mean you’re late or behind, but it does change how you experience money. In midlife, money stops feeling theoretical and starts feeling personal, which is why it often brings up deeper emotions than it ever did before.

The Invisible Losses Women Carry Around Money

For many women, money carries the imprint of time spent caring for others. Careers paused or slowed to raise children, support a partner’s work, manage a household, care for aging parents, or navigate health challenges often come with real financial consequences. Lost income, missed retirement contributions, and slower compounding don’t always feel visible in the moment, but they can surface years later with a quiet sense of regret.

There are also losses tied to paths not taken. Fertility journeys that were longer or more expensive than expected. Divorces that reshaped financial security. Career ambitions that had to be adjusted for practical or emotional reasons. Even women who made these choices willingly can still grieve what they cost, both financially and personally.

What makes these losses particularly heavy is that they’re rarely named. Society often frames them as “just the way life goes,” leaving women to carry the emotional and financial weight privately. Recognizing these invisible losses means honoring the full context of how you arrived here, so you can move forward with more compassion and less self-judgment.

Comparison Gets Louder in Midlife

By midlife, you’re no longer talking about potential or ambition. You’re comparing outcomes. Who paid off their house? Who retired early? Who seems financially settled while you still feel uncertain?

Social media and casual conversations make this worse. You see curated versions of other people’s lives without the context of what it took to get there or what they may have sacrificed along the way. What’s missing from view are the inheritances, dual incomes, health luck, family support, or simply different timing that shaped those outcomes.

Comparison also gets louder because the milestones feel fewer and more fixed. Earlier in life, there’s comfort in believing there’s plenty of time to catch up. In midlife, timelines feel more real, which can turn comparison into self-criticism even when your choices were thoughtful, necessary, or rooted in care for others.

What’s easy to forget is that financial lives are deeply personal and rarely linear. Two people with the same age and income can arrive at very different places for reasons that have nothing to do with discipline or intelligence. 

When comparison takes over, it pulls focus away from your priorities and toward a version of success that may not even fit your life. Recognizing that shift is often the first step toward quieting the noise and reclaiming your own definition of enough.

Why Women Internalize Money Grief

Money grief often settles inward for women because so many financial choices are tied to care, responsibility, and relationships. 

Decisions about stepping back from work, supporting a partner’s career, caring for children or aging parents, or prioritizing stability over growth are rarely framed as financial sacrifices in the moment. They’re deemed as practical, loving, or necessary.

There’s also a long history of women being socialized to take responsibility for outcomes that were shaped by systems larger than themselves. Pay gaps, interrupted careers, unequal caregiving expectations, and lack of access to financial education don’t always show up as external barriers. Instead, they get internalized as personal shortcomings. The story becomes “I should have planned better” rather than “the structure was never designed to support me.”

Silence plays a role, too. Many women were taught not to talk openly about money, especially disappointment or fear around it. Without language or space to process those feelings, grief turns inward. It shows up as self-blame, shame, or the sense that it’s too late to change course.

How to Move Forward Without Ignoring the Grief

Moving forward doesn’t mean pushing grief aside or pretending it doesn’t matter. You should learn from it and let it inform your next chapter without allowing it to define your future. 

Name What You’re Grieving

Grief around money is often vague, which makes it heavier. Naming it gives it shape and limits its power.

You might be grieving time that feels lost, options that closed sooner than expected, or a version of life you thought your finances would support by now. You might be grieving sacrifices that were necessary but still costly, or choices that made sense in the moment and feel harder in hindsight.

Putting words to that grief matters. When you name what you’re mourning, it stops leaking into every financial decision as generalized anxiety or self-criticism. It becomes something you can acknowledge, respect, and move alongside rather than something you’re constantly trying to outrun.

Separate Facts From Fear

Grief has a way of blurring the line between what’s true and what feels true. Fear often fills in the gaps with worst-case assumptions, especially around time, aging, and financial security.

Facts are your current numbers, your income, your assets, your obligations, and your realistic options. Fear is the story that it’s too late, that you’re permanently behind, or that one wrong move will undo everything.

Separating the two doesn’t minimize risk. It simply grounds your decisions in reality instead of emotion. When you work from facts, you gain financial confidence.

Redefine What Success Looks Like Now

Success in midlife often needs a new definition. The one you carried in your 30s may no longer fit your life, your responsibilities, or your values.

Instead of measuring success by old milestones or comparisons, ask what would make your financial life feel steadier, more supportive, or more aligned right now. That might mean building resilience instead of maximizing growth, creating flexibility instead of chasing aggressive targets, or prioritizing peace of mind over speed.

Build a Plan That Honors Both Logic and Emotion

A sustainable financial plan accounts for numbers and for humanity. Logic matters. Projections, timelines, and strategy are essential. But emotion matters too, especially after loss, disruption, or prolonged stress.

This is where working with a financial planner can be especially valuable. A good planner doesn’t just optimize spreadsheets. They help translate uncertainty into options, weigh trade-offs without judgment, and design a plan that feels realistic.

When your plan acknowledges both the math and the emotional reality behind it, it becomes a source of stability instead of pressure. It gives you structure without erasing what you’ve carried, and direction without denying where you’ve been.

Grief Is Not a Sign You’re Failing

If money feels heavier in midlife, it’s because your financial life now carries history, responsibility, care, and trade-offs that weren’t as visible before. Grief is a natural response to realizing that some choices had real costs, even when they were made thoughtfully and with love.

What matters most is what you do next. When you name what you’re grieving, separate facts from fear, and redefine success on your own terms, you create space for steadier decisions and a calmer relationship with money.

If you need help creating a plan that reflects where you are now and where you want to go next, I invite you to start with my short questionnaire. It’s a simple way to share your situation and see whether working together could support this next chapter with more clarity and steadiness.

Why Big Life Events Can Derail Even the Best Plans

Most financial plans are built around a version of life that moves forward in a straight line. Income grows steadily, expenses stay predictable, and goals unfold on schedule. However, real life rarely works that way.

Events like divorce, fertility treatments, disability, caregiving, illness, or the loss of a partner change cash flow, timelines, priorities, and capacity all at once. Even a solid plan can feel irrelevant when the ground shifts underneath it.

During these moments, people often make financial decisions for survival, not optimization. You do what you need to do to get through the next month or the next year. That might mean spending more than planned, saving less, or pausing long-term goals entirely. None of that means the plan was bad or that you failed.

What’s often missing isn’t discipline or foresight, but flexibility. Big life events require plans that can bend without breaking. Understanding that context is the first step toward rebuilding without shame and moving forward with clarity.

Making Peace With Past Financial Decisions

For many people, the most difficult part of rebuilding after a major life change isn’t running the numbers or creating a new plan. It’s the emotional weight of looking back and wishing certain choices had been different. 

The money spent earlier than planned, the savings that didn’t happen, or the decisions that feel obvious now but were anything but clear in the moment can linger and quietly undermine confidence.

This reaction is far more common than most people realize. In fact, research shows that 43% of Americans say money negatively affects their mental health, contributing to stress, anxiety, and feelings of guilt or regret. 

When something as personal as finances intersects with events like divorce, fertility challenges, illness, disability, or loss, those emotions can intensify, making it harder to separate past circumstances from present reality.

What often gets overlooked is context. Financial decisions are shaped by health, family needs, emotional capacity, and the information available at the time. In many cases, what looks like a mistake in hindsight was a reasonable response to a situation that required stability, care, or survival.

Making peace with past financial decisions doesn’t mean minimizing them or pretending they didn’t matter. It means recognizing that those choices were part of a chapter, not the whole story. 

When you replace self-criticism with context, you create room to engage with your finances more honestly, rebuild with intention, and move forward without carrying unnecessary shame into the next phase of your life.

How to Recover After a Financial Setback

Recovering after a financial setback often begins with taking a breath and giving yourself permission to reset.

1. Start Where You Are, Not Where You “Should” Be

After a major life event, it’s easy to measure yourself against where you thought you would be by now. That comparison can quietly shape every financial decision, often in unhelpful ways. Plans built around “shoulds” tend to create pressure, not progress.

Real recovery begins when you release the idea of a perfect timeline and focus instead on your current reality. 

Your income, energy, responsibilities, and priorities may look very different than they did before, and that’s not a failure. It’s information. When you allow your plan to reflect your life instead of an outdated expectation, it becomes far more supportive and sustainable.

2. Get Clear on Your Current Financial Picture

Clarity comes from putting the numbers somewhere you can see them. That doesn’t mean building a perfect system or fixing everything at once, but creating a simple snapshot of your current reality.

Start by gathering four things:

• What you own, including accounts, savings, investments, and property
• What you owe, such as mortgages, loans, and credit cards
• What’s coming in each month
• What’s going out on a regular basis

This can live in a notebook, a basic spreadsheet, or even a single document. The format matters far less than the act of getting it out of your head and onto paper. When the numbers are visible, they stop feeling abstract and overwhelming, and they become something you can work with.

Many people are surprised by how much calmer they feel after this step alone. You’re not solving every problem yet. You’re simply giving yourself a clear starting point after an income shift, and that clarity makes every next decision easier and more grounded.

3. Redefine What Success Means Now

After a major financial detour, it’s common to measure success using an old definition that no longer fits. Maybe success once meant maximizing savings, retiring early, or hitting specific milestones by a certain age. Life changes can shift what’s realistic, what’s necessary, and what actually matters.

Redefining success starts with asking a different set of questions. What does stability look like right now? What would make your financial life feel more manageable this year? 

In some seasons, success might mean rebuilding an emergency fund, creating a steady cash flow, or simply feeling less anxious when you check your accounts. Allowing success to evolve with your life gives you permission to move forward without constantly feeling behind.

4. Build a Plan That Supports Your Life Today

A plan is meant to support you, not punish you for what’s already happened. The most effective financial plans reflect your current circumstances, including your income, responsibilities, health, and capacity, rather than an idealized version of the past.

This is often where working with a financial planner can make a meaningful difference. 

After a major life change, it’s hard to see the full picture clearly on your own. A planner brings perspective, helps you prioritize what matters most right now, and turns uncertainty into a set of realistic options. Instead of reacting to guilt or pressure, you can make decisions with context and intention.

Building a plan for today means setting goals that feel achievable and relevant. That might involve adjusting savings timelines, pacing debt repayment, or creating more flexibility while life continues to evolve. When your plan is built around the life you’re living and supported by guidance you trust, it becomes a stabilizing force rather than another source of stress.

You Are Not Behind, You Are Rebuilding

When life takes an unexpected turn, it can be hard not to measure yourself against where you thought you would be by now. But financial recovery isn’t about catching up to an old version of the plan. You need to get clear on where you are today and build forward from there with intention.

Big life changes often require new definitions of stability, success, and progress. When you give yourself permission to work from your current reality instead of past expectations, the path forward becomes clearer and far less heavy. Rebuilding doesn’t happen all at once, but each step you take with context and clarity creates momentum.

If you’re navigating a financial reset after a major life change and want thoughtful support without judgment, I invite you to fill out my short questionnaire. It’s a way to share where you are, what you’re working through, and explore whether working together could help you move forward with more confidence and ease.

• You build confidence with money by understanding the big picture, including what you own, what you owe, and what you spend, so your decisions come from clarity instead of guesswork.
• Confidence grows when you use simple habits that keep your financial life visible, such as gathering your numbers, having honest conversations, and celebrating small wins.
• Letting go of old money myths and using practical systems helps you make choices that feel intentional, calm, and aligned with the life you want.

Why Many People Don’t Feel Confident With Money

People assume that money confidence comes from knowing financial terms, having better tax strategies, and keeping up with market updates. However, most of the time, the real reason people don’t feel confident with money has nothing to do with knowledge and everything to do with the stories they’ve absorbed over time.

Many of us grew up in families where money wasn’t talked about openly or it was talked about only in moments of stress when income shifts. 

Some people learned that money was scarce. Others learned that it was impolite to discuss. For many, money became tied to comparison, like watching friends, coworkers, or social media, and assuming everyone else is doing better.

It’s not just you. Recent national research shows that nearly two-thirds of Americans feel stressed about their finances and more people are now spending beyond their income.

When money feels emotional or unclear, avoidance becomes the default. Not checking accounts, delaying decisions, or hoping things sort themselves out are all common coping strategies, not personal failures. Finding money confidence in these moments is almost impossible.

The good news is that confidence doesn’t require perfection. It comes from knowing what you own, what you owe, and what you spend. Once the fog lifts, the anxiety begins to fade. That’s when confidence finally has space to grow.

The Three Questions That Build Money Confidence

Money confidence comes from asking the right questions and being honest with what you find. These three questions form the foundation of financial clarity. Once you can answer them, you’re already ahead of most people.

1. Do You Know What You Own?

Most people have more accounts, assets, and resources than they think. They’re just scattered across old employers, banks, investment apps, and joint accounts. When everything is spread out, it’s easy to feel disconnected from your financial life.

In a 2025 survey, only 58% of Americans said they know their net worth, while 21% said they do not and another 21% were unsure.

Knowing what you own means gathering the big picture:

• Your bank and investment accounts
• Retirement plans from past and current employers
• Equity, RSUs, and stock options
• Real estate or business interests
• Savings, emergency funds, or cash reserves

Seeing it all in one place gives you grounding. It turns money from something abstract into something real and manageable. That clarity alone builds confidence, because you finally know where you’re starting from.

2. Do You Know What You Owe?

Debt carries a lot of emotional weight, and that alone can undermine confidence. Many people avoid looking at what they owe because they assume it reflects a mistake or a misstep, when in reality, debt is simply a tool. The confidence comes from understanding it, not fearing it.

Knowing what you owe means looking at your:

• Mortgages
• Student loans
• Credit cards
• Car loans
• Business or personal loans
• Lines of credit

Just like with your assets, the goal isn’t to judge the numbers. It’s to know them. Understanding interest rates, monthly payments, and payoff timelines helps replace anxiety with direction.

3. Do You Know What You Spend?

This is the question most people want to skip, because they assume the answer will require restriction or a tight budget. But knowing what you spend doesn’t mean policing yourself. It helps you build awareness about how money moves through your life so you can make intentional choices.

You don’t need a complicated spreadsheet to start. A simple snapshot of your monthly spending is enough to create clarity. There are apps for your phone or computer that will do 90% of this work for you.  Review what consistently matters to you, what no longer does, and what surprised you when you saw it in writing.  

When you understand your spending, you gain control. It becomes easier to say yes to what aligns with your values and no to what doesn’t. This is often the moment clients tell me they feel the biggest shift, because spending clarity creates permission, which leads to confidence.

Practical Ways to Build Confidence With Money Starting Today

Confidence with money isn’t something you earn after you hit a certain number in your bank account. It’s something you build through simple, repeatable habits that make your financial life easier to understand.

Get Your Numbers in One Place

Scattered information creates anxiety. Confidence comes from visibility.

Put everything, including what you own, what you owe, and what you spend, in one place. It can be a simple document, a notes app, or a folder with your most recent statements. The goal isn’t to analyze it yet. It’s simply to gather it.

Almost every person I meet feels an immediate sense of calm once everything is visible. When your financial life is in one place, it stops feeling like a mystery you’re supposed to figure out alone and starts feeling like something you can actually manage.

Make Money Conversations Normal

For many people, money has been a taboo topic their entire lives. That silence creates shame, and shame erodes confidence.

Start normalizing money conversations with a partner, a trusted friend, or a financial professional. You don’t have to dive into every detail right away. Begin with one question at a time, like: 

• What are we saving for? 
• What matters most to us? 
• What’s something we want to feel differently about with money?

Celebrate Small Wins

Money confidence grows when you nurture good habits.

• Paid off a small balance? Celebrate it.
• Opened a retirement account? That counts.
• Reviewed your spending for the month without judgment? That’s progress.

When you give yourself credit for the steps you are taking, you reinforce the belief that you can handle your money. That belief becomes confidence, not because everything is perfect, but because you’re paying attention in a way that empowers you.

Common Myths That Hold People Back From Money Confidence

A lot of the fear around money comes from long-held myths that make people feel like they’re already behind. Naming them is the first step toward letting them go.

• “I should already know how to do this.”

No one is born knowing how money works. Confidence grows when you’re willing to ask questions and learn as you go.

• “I need to have everything figured out before I start.”

You don’t. You just need one next step. Clarity grows with action, not waiting.

• “I’m bad with money.”

Most people aren’t bad with money.  They’ve just never been taught a system that works for them.

• “Talking about money is stressful, so it’s better to avoid it.”

Avoidance creates anxiety. Talking about money in small, safe ways builds confidence.

• “If my income were higher, I’d finally feel secure.”

Higher income doesn’t automatically create clarity. Understanding your numbers does.

You Don’t Need Every Answer to Feel in Control

Confidence with money grows from clarity and momentum. That means the small steps you take, the questions you’re willing to ask, and the understanding you build over time. 

When the pieces of your financial life finally make sense in one place, the stress starts to quiet down. Decisions feel easier. You feel more grounded and more capable.

That’s the whole point. Not perfection, but a sense of control that lets you move through your life with more ease and less hesitation.If you’re ready for clearer answers and a plan that truly reflects your life, fill out my short questionnaire. It’s the first step toward understanding where you are, what you want, and whether I’m the right person to help you get there.

Jessica Lanning, CFP®

Email: jessica@lanningfinancial.com
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.