HONOLULU (KHON2) — Hawaiʻi’s high cost of living presents unique financial challenges, from expensive housing to everyday necessities. Effective financial planning is essential for long-term security, but many residents struggle to navigate saving, investing and wealth-building strategies.
KHON2.com sat down with Taylor Nakamura who is a financial advisor with Northwestern Mutual in Honolulu. He has spent more than a decade helping individuals and families take control of their financial futures.
With deep expertise in Hawaiʻi’s economic landscape, Nakamura offered practical advice for managing money, growing assets and achieving financial stability.
1. Create a plan, no matter the challenges
Nakamura’s first piece of advice for anyone considering their financial future is to make a plan.
“The number one thing I suggest is to make a plan,” he said. “Financial decisions are often clouded by overwhelming factors, such as inflation, rising living costs and unexpected emergencies.”
Yet, Nakamura believes the act of planning — whether on your own, with a spouse or with a professional — can clear the fog.
“We need to have a plan of what we want to accomplish,” he emphasized.
2. The rule of 60/20/20
When creating a financial plan, Nakamura recommended following the 60/20/20 rule.
“Sixty percent of our income should be used for fixed expenses. That’s things like rent or mortgage,” he explained. The next 20 percent should be reserved for savings, and the final 20 percent is for personal enjoyment”
This is the opportunity to create a fund to save for things like dining out or vacations.
“I like to call that the ‘fun bucket,’” Nakamura added with a smile.
He acknowledged that in times of economic uncertainty, like the current inflationary period, some flexibility may be required. For instance, reallocating funds from the fun bucket to necessities might be necessary for short-term survival.
3. Addressing inflation in Hawaiʻi
Hawaiʻi is notorious for its high cost of living and has felt the sting of inflation more than most states. Recent reports show Hawaiʻi has the second-highest price increases in the nation.
To combat this, Nakamura advised creating a budget that reflects both the short-term and long-term goals.
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“We have to ask ourselves: what do we want in the future?” he said. “Whether it’s a year, five years or even ten years from now, having a clear vision of the future makes it easier to adjust spending today.”
This approach is especially useful in Hawaiʻi, where cutting costs can be challenging.
“We may have the ability to save but not the incentive or the plan to do so,” Nakamura added.
4. The importance of an emergency fund
For households like that of a single mother with children, financial planning becomes even more crucial. Nakamura highlighted the importance of having an emergency fund.
This is a cushion to fall back on when unexpected expenses arise.
“I always recommend having three to six months’ worth of expenses saved,” he said. “This fund becomes a safety net for families, especially when dealing with healthcare costs or surprise school-related expenses, common for families with children.”
Even if it’s difficult to build up this savings initially, Nakamura stressed the importance of starting early.
5. Financial planning is for everyone
Many people believe that financial planning is only for the wealthy, but Nakamura strongly disagreed.
“Financial planning is for everyone,” he said. “It’s not just for multi-millionaires.”
He explained that a financial advisor can tailor their strategies to fit anyone’s needs. Whether you’re living paycheck to paycheck or managing a higher income, the key is having someone who looks out for your best interests.
Nakamura emphasized that a good advisor will take on a fiduciary responsibility. This means they are legally required to act in your best interests.
“It’s about ensuring we care about your outcomes, not just the paycheck,” he added.
6. The power of financial clarity and purpose
Creating clarity around financial goals is critical. Nakamura’s mission is to help clients “create a life of abundance through clarity, purpose, and design.”
This means knowing exactly what you want out of life, both short-term and long-term, and designing a plan to get there.
Without clarity and purpose, saving money can feel aimless or unnecessary. But by identifying specific goals — whether that’s saving for a child’s college fund, a home, or retirement –Nakamura believes that individuals are more likely to stick with their savings plan.
7. Tailored savings strategies
Financial planning doesn’t need to be one-size-fits-all.
“The tactics and tools vary depending on who’s in front of you,” Nakamura said. “Families, for example, need to focus on more immediate financial goals, such as debt reduction and building emergency funds, while wealthier individuals might consider tax-advantaged savings vehicles or investment strategies.”
However, even for families struggling to make ends meet, Nakamura believes there are always opportunities to save or invest, even if those opportunities are small.
“Start with the small things,” he advised, “and over time, it adds up.”
8. The role of inflation and the Jones Act
Nakamura acknowledged the complexity for Hawaiʻi-specific challenges, such as the Jones Act and the increasing tariffs that could raise prices further.
The Jones Act mandates that goods shipped between U.S. ports must be transported on American-owned ships. This additional layer of import laws raises shipping costs to Hawaiʻi.
Nakamura’s advice remained the same: “Make a plan, stick to it and make adjustments where needed.”
9. Start early; it’s never too late
One of the most significant barriers to financial planning, according to Nakamura, is the belief that it’s too late to start.
“I always tell people it’s never too late to start thinking about your financial future,” he said.
Whether you’re in your 20s or 50s, it’s important to take that first step toward securing your financial well-being.
“If you don’t have a plan, you’re not going to get anywhere,” Nakamura warned.
10. Building a relationship with a financial planner
Nakamura encouraged everyone to meet with a financial planner, even if they are nervous or unsure.
“You never know where that first meeting will take you,” he said. “Building a relationship with a financial advisor is a powerful step toward securing your financial future.”
Nakamura advised that a good financial planner will listen to your concerns, understand your goals and help design a strategy that fits your specific situation.
Financial planning doesn’t need to be overwhelming, even in Hawaiʻi’s unique financial landscape.
By creating a plan, building an emergency fund and working with a financial advisor, anyone can improve their financial security.
As Nakamura puts it, “Success never happens by accident.” You can click here to learn more about Nakamura.
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With a little guidance, clarity and purpose, achieving financial stability is within reach for everyone, no matter where they are in life.
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