Ignore every financial new year’s resolution.By Jared F. Thompson, February 2, 2019
What’s the best stock to buy this year? How much do I need to save to retire at 60? Should I buy or lease my next vehicle? All legitimate questions, but they will never displace the value and importance of implementing fundamental financial strategies.
This year avoid big resolutions with short-lived resolve. The savviest individuals will thrive by focusing on five core principles from the Wealth Partners’ financial philosophy:
Give Before You Receive
We believe it is vital to give back generously to church, charity, your profession, or the community before accepting any of our earnings. We are where we are today because of the generosity of others’ time, talents and resources. Let’s keep this cycle going. When we give first, we are better stewards with what remains. Many of our most successful clients happen to be the most generous. Start with a number that feels right for you and increase it over time.
Pay Yourself First
The order in which we use our money is critical. This is why after we give back a portion of our earnings, we pay ourselves and then spend what’s left over. Before paying your mortgage or paying your utility bills, before any bill is paid, put away 10% and place it out of easy reach – perhaps with an institution separate from your bank or credit union. Work towards a liquid balance that provides 6-12 months of basic living expenses, then expand from there. With an automated, guided plan of paying yourself first, you can experience a sense of confidence and security as you envision the financial future you’re creating.
Before any bill is paid, put away 10% and place it out of reach separate from your bank or credit union.
Spend Less Than You Earn
You may be surprised to know that many of the highly compensated professionals we meet initially live paycheck to paycheck. Their money is already “spent” before the income even hits their accounts. It’s unfortunate and it often creates a lifestyle of stress. We’ve worked with numerous households to help them navigate through troubling cash flow waters — an area most financial professionals don’t dare touch. Our clients often allow us to intervene early, being a voice of reason and an arbiter between poor habits and proper preparation for the future.
Have a Genuine Financial Plan
Strong fortresses are built one stone at a time, but before the building begins, the fortress is conceived by way of creating a plan. When building your financial fortress, having a blueprint that incorporates the tools and techniques to help you reach your value-based financial goals is critical to success. While circumstances are ever-changing, having a blueprint serves as a benchmark for denying or accommodating future wants and needs.
Use Those Credit Cards Wisely
Ah, but it’s not as simple as most would believe! We like to ask our potential and veteran members about their spending habits. Inevitably, the topic of credit cards works itself into the conversation. We typically hear something like: “Oh, we just use them for the points then we pay them off in full at the end of each month.”
“Yikes!” is my initial thought. All too often, point accumulation or the simplicity of using credit cards justifies unhealthy spending amounts. I typically don’t ask whether cards are being paid in full at the end of each month. I would much rather know how often they are being used and whether the card spending is consistently in check. In other words, it is not if the cards are being used, rather how they are being used.
Toasting to your financial future!
We have covered only five core principles of the Wealth Partners’ financial philosophy. Though few in number, they are some of the most important to building a solid financial foundation. They have been incorporated into the financial plans of our clients across the country as we help them achieve their goals. Here’s to you and your financial future!