You are CFP professional and meeting Monica and Matt, new clients, for the first time. Monica takes care of the money management in a very old fashioned way. She knows where each paycheque goes but lives pay cheque to paycheque. Her definition of an emergency fund is an envelope for the next item she is saving for. You need to encourage this client to save more and implement a more formal savings program ....how do you have this conversation?
A) Suggest setting up an automatic transfer to a savings account and discuss the benefits of an emergency fund.
B) Recommend investing in high-risk stocks and bonds for higher returns.
C) Advise against saving money and instead focus on spending for immediate gratification.
D) Discuss the option of taking out a loan for emergency expenses.