Archive for Oklahoma

The 50/20/30 Rule of Budgeting

by Whitney Hufnagel, Heritage Trust

Life is all about making decisions. From the time you wake up each morning to the time you go to sleep each evening, you will have likely made hundreds of decisions. Most daily decisions seem small and routine, and every now and then a major life decision is sprinkled in the mix. Most of us can probably agree that it is easy to see how major life decisions can have a large impact on our financial situation, but how many of us realize the compounding effect these seemingly small daily decisions can have on our ability to reach our financial goals?

Our daily decisions, whether good or bad, help form habits. The habits we create have the ability to carry us successfully towards or destructively away from our goals. Creating a budget is just one tool that can help foster and maintain healthy financial habits. Budgets allow us to make sure we are spending our dollars wisely and in a manner that is appropriate for our unique situations and interests. Often times, people don’t attempt to budget or give up on budgeting because it can be time consuming, confusing, boring, unrealistic, or feel too restrictive; however, used in the right way, a budget can be very powerful and aid in daily decision making.


The article below discusses a simple 50-20-30 rule to budgeting that may make budgeting easier for a novice and quicker for a pro. Simply put, 50% of your income should go towards living and essentials, 20% should be allocated towards financial goals, and 30% should be allocated towards those things you want but don’t need. As the article mentions you can adjust the percentages in a way that fits your unique situation. However, try not to reduce the 20% allocation toward financial goals. If anything, increase that allocation.

Please remember, this is a rule of thumb and does not ensure financial success. It is simply a tool that can help you determine whether your decisions and habits are financially healthy, help you identify areas of improvement, and help you maintain a level of awareness to make sure you are spending your dollars in an enriching way for your unique lifestyle. If you would like to discuss budgeting or financial planning in more detail, please contact us to see how we can help you.

New to Budgeting? Why You Should Try the 50/20/30 Rule –

If you’re new to budgeting, figuring out how to manage your money each month can feel overwhelming. Not only do you need to organize, but you also have to make difficult decisions about how to spend your cash. Relying on the experiences of others can help only so much, because your income and expenses are unique. Someone may be able to spend $2,000 per month on rent in Arlington, VA, but that kind of spending may not work for you.

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The Wedding Metaphor

by Whitney Hufnagel, Investment Analyst

After five years of dating, Kevin finally asked me to marry him. I was so excited to start planning the next chapter of our lives and the wedding I had dreamt of since I IMG_9974was a little girl.

While mostly enjoyable, the wedding planning came with some challenges. We knew sticking to our budget would be difficult to accomplish a traditional Catholic wedding ceremony followed by a reception with dinner, drinks, and dancing with a large guest list. Therefore, we started by prioritizing what was most important to us which helped us define our wishes and compromise where needed.

Adequate time allowed us to carefully plan every detail at the best possible price. Planning also helped us identify and calmly navigate minor obstacles which included finding the perfect baker upon learning our original choice was already booked as well as finding a more suitable photographer after receiving lackluster engagement photos. However, neither of us truly realized the complete value of all the planning until our wedding day arrived. Our blueprint provided organization, a sense of security, and allowed us to achieve our goal of having a stress-free wedding day where we could focus on one another and our journey all while being able to fully engage in celebration with family & friends.

Just like the time spent planning a wedding can help pull off a successful wedding day, creating a comprehensive financial plan can help pull off a successful financial future. While the size of your wealth helps determine the time and resources required to build and update a comprehensive financial plan, it is never too early to start and no asset size is too small to benefit. As with wedding planning, financial planning helps couples and families prioritize how to allocate money to achieve dreams and goals. Planning also helps make sure all involved are on the same page and compromise when necessary.

Being proactive with planning and making appropriate updates creates an opportunity to identify warning signs and make corrections before it’s too late and
provides ample time to make better informed decisions. A financial plan can help ease concern when it comes to investment returns and taxes and has the power to put all the pieces of your financial puzzle together to help build and ensure sustainability. Like planning a wedding, the value in a comprehensive financial plan is often seen in hindsight, but you will be pleased you invested your time and money on your financial blueprint.

Photo courtesy Horton Studios

Generational Management

by Kevin Karpe, Heritage Trust

Kevin KarpeWhen I was 25 years old and new to the business, I served as a trustee for a 90 year-old Holocaust survivor. That experience not only changed my view of what it means to administer trusts, but helped shape my view of the world. She asked that we get together on a weekly basis to talk about her investments, but when I’d come to see her, I would have two bottles of wine with me. One to drink, one to last her through the week. She explained so much more to me than I would have ever been able to explain to her. Twenty-five years and a couple of generations later, I’m still administering a family trust and repeating those stories the grandmother entrusted to her family.

As relationship managers, we take our duty very seriously. There’s more to managing a relationship than can be contained in the four corners of a document. We take time to get to know our clients very closely. It’s our obligation to understand the expectations of a grantor while recognizing the needs and aspirations of the beneficiaries. In a nutshell, we spend our days transferring wealth, as well as values, to the next generation.

My enjoyment comes from working with families, often over multiple generations. A relationship with a family can be short and simple, like administering an estate over the span of a few months, or last for decades, like managing a trust for grandchildren.

We ask our clients, “What legacy do they want to leave?” Not necessarily spending or budgeting or asset management, but what are your values and what values do you want pass on?

A common mistake clients can make is drafting a trust document and then not readdressing the overall plan when there’s a big life event such as a divorce, a child graduates from college or reaches a certain age. Those are all good opportunities to readdress your intent and adjust accordingly.

When it comes to selecting a fiduciary to work with, I think it’s important to look at the following things: Experience. Independence. Rapport. Clients need to have confidence in the institution as a whole and look at their history.

As a relationship manager, I look forward to the unique life stories and legacies each client brings and figuring out how we can do our part to pass on that legacy.

Kevin Karpe is senior vice president, relationship management, for Heritage Trust.  You can read more about Kevin here and contact him anytime at

The Greatest Gifts

by Phil Buchanan, Argent Financial Group

My mother was born just prior to the stock market crash of 1929 and the ensuing Great Depression. Although only a child during this period, she quickly learned to be a good steward of finances. It was a trait that followed her for the rest of her life. It was also something that she sought to instill in my sister and me. I can now look back and realize that her teachings with regard to the honor and value of work, of the necessity of saving and investing, and of the nobility of philanthropy, were among the most important and greatest gifts she gave to me.


In a society where financial information is more readily accessible than ever, I observe many families who are not engaging their rising generations in meaningful conversations with regards to wealth, its purpose, its capacity and its stewardship. While the immediate risks of not engaging in such dialogue are limited, the longer term impacts can be quite negative.

At an appropriate age (most professionals tend to suggest between 14 and 17), children of families with means need to be brought into discussions as to the foundational beliefs and values that the family shares with regards to wealth. A basic primer on the structure (not value) of the family’s wealth situation (business interests, core portfolio holdings, royalty interests, etc.) is usually advisable at this time as well.

As children continue to demonstrate interest and maturity towards learning more, these discussions and teachings should continue. One of the greatest risks a family can take with regard to wealth is failing to educate and prepare future generations. With a bit of effort and patience along the way, you can ensure proper stewardship of wealth for generations to come.

Mineral Management Realities

by David Luke, Heritage Mineral Management

David LukeNegotiating lease opportunities during a boom is obviously an exciting time for mineral owners. During these periods, our team looks at negotiating power and competition to maximize client opportunities. During a down time of falling commodity prices, it can become a challenge. This is especially true when activity has been high and prices have been very strong – this is exactly where we stand today.

An owner’s minerals and their power take a hit in an environment like this. The key is to analyze how long or short term we believe the decline will last, the recent and historical bonus and royalty rates in the area (from both offering and non-offering parties), and knowing the primary commodity product that will likely be produced from the given location of negotiation. At Heritage, we provide expertise and real value to our client base at all times, but especially in times when some of the owner’s asset power is reduced. One strategy we like to use at Heritage is to create competition and strength by batching properties together. Because of our extensive portfolio, we are able to benefit many clients at once with this strategy.

Many factors contribute to the volatility of the natural gas price and the drastic fall of the crude oil price. Yet even in difficult times, a large volume of Heritage client-owned acreage has been involved in valuable lease negotiations. The Heritage Mineral Management team has used our experience, teamwork, research, vast contacts, and old-fashioned common sense to lease (or not to lease) minerals at what we believe to be very fair to strong terms.

Rest assured, Heritage Mineral Management looks at every side of a situation to take the best course of action for our mineral rights’ owners. With our savvy team, your minerals are in great hands, no matter what the market is doing at the moment.

David Luke is managing director of Heritage Mineral Management.  You can read more about David here and contact him anytime at


Good News About Retirement

by Brad Knowles, Heritage Institutional

When 401(k) plans were introduced in the marketplace in the 1970’s, they were designed to allow highly compensated workers to put more money away for retirement. This is because the traditional pension plan was still the dominant retirement plan at employers. Today, 401(k) plans are the primary retirement savings vehicle. The move from pension plan (employer funded) to 401(k) plans (employee funded) means we are now using a wheelbarrow to do the job of a bulldozer.Brad Knowles

The word “retirement” is in the news almost every day. Every newscast shows how the Dow, NASDAQ, and S&P 500 performed, but what does it really mean?

  • Approximately 8,000 baby boomers turn 65 years old every day.
  • Social Security is designed to replace approximately 25% to 30% of a working couples income.
  • The average couple will need just over $200,000 to cover their healthcare cost
    during retirement.
  • 68% of Americans between the ages of 50-64 report their biggest worry being not having enough money for retirement.

For most, it is not a question of if they retire, but how long can they afford to stay retired.

Now comes the good news….

There are ways to make our wheelbarrow work more like a bulldozer. We know that
workers need to put between 12% and 15% of salary away each year. When combined with social security and time, this formula should replace about 75% to 80% of the average workers income, with approximately have of that coming from retirement savings.

We know the average worker is not going to just accidentally start saving 10% of pay. We, as employers, have to be courageous. We have to automatically enroll our employees in the plan. We have to automatically increase their deferral incrementally over time. We also need to change our viewpoint on matching funds. We need to optimize the match to encourage/reward higher deferrals. Optimizing the match means matching 40% to 10% instead of 100% to 4%. If we optimize the match, employees will be more satisfied about increasing their contributions.

Studies show that less than 10% of participants that are automatically enrolled in the plan opt out. Over time, we can change the culture. We would love to see 90% participation in retirement plans, 10% average deferral rate, and 90% utilization in professionally managed investments.

Retirement means many different things to different people. To some it means changing vocations, to others it is not working, and yet to others, it means a time to volunteer. To Heritage, retirement means the opportunity for our clients to have those choices.