Published by Teresa Milner
The constant barrage of daily decisions can easily cause fatigue and tire out our brains. This can cause us to suffer from the inability to make good decisions. Whether we realize it or not, we are all a product of our decisions. Financial decisions are made daily, and some can and will haunt you for the rest of your life. In my opinion, the toughest financial decision/choice is to PAY YOURSELF FIRST, and then the rest comes into play…
Below are some helpful tips on daily financial decisions for you and your family:
- In my many years of living, as well as my years of experience of being a financial advisor, I have yet to hear someone say they saved too much money. The ability to pay yourself first is a tough one, but one that you’ll never regret.
- Start early! Again, I’ve never had someone say they started saving money too early. Let me breakdown the power of compounding in simple terms: The more time you have, the less money it takes to save for retirement! The less time, the more money you’ll need to save.*
Have an Emergency Fund
- Don’t borrow for emergencies. Maybe you’ve already survived an emergency and just got done getting out of debt from it, so you know what pain that can cause.
- Define what an emergency is and stick to it. Needing a new pair of shoes for the Nonprofit Gala you were asked to attend is not an emergency. Your hot water heater that is 20 years old and took its final breath is an emergency.
- Save a little every week/month until you have upwards of 3 month’s salary saved (or more).
- If you have to stop/decrease buying lattes for a while at the local coffee shop in order to give yourself confidence in establishing your Emergency Fund – DO IT!
Eliminate Unnecessary Debt
- If you have credit card debt, ALWAYS pay more than the minimum payment required. And ALWAYS pay on time.
- Wouldn’t you rather have interest paying you instead of you paying interest?
Live Within Your Means
- Don’t dread paying for something you can’t afford.
- If you want a new kitchen table and chairs, determine a reasonable amount you’re willing to spend, and then save that amount. Don’t use credit and pay interest to do so. If you do, in the long run, you’ll end up paying way more than what you determined was reasonable for the purchase.
- You want to go on a family vacation? Save the money for the trip before you go. This method will make the trip even more memorable and enjoyable as it will be viewed as a reward and not another debt you have to eliminate.
Track Your Spending/Create a Budget
- Know where your money is coming from and where it is going. How do you know what you can and/or can’t afford if you don’t know what your income/expense ratio is?
- Take any given month, and journal where you spend your money each day. This can be a very eye opening experience, and perhaps help you realize you do have the ability to SAVE MORE!
- When creating your budget, make sure one of the line items is PAY YOURSELF FIRST!
Oh, that constant stream of decisions – and in so many areas of our life… Decide to make your financial health a priority. Look for and find a financial advisor you can trust in helping you make important financial decisions. Learn how to start investing in yourself today in order to avoid regret later. Finding a financial advisor is the first step in your journey!**
*Investing involves risk, including loss of principal.
**No strategy assures success or protects against loss.