Every year we make new resolutions—weight loss, get out of debt, clean out the garage. Have you ever noticed they are usually the biggest, most persistent points of pain in your life at that present moment? Why is that? Why do we wait until something is a source of pain or irritation before something is done about it?
Unfortunately, this near-sightedness can actually do more harm than good. Why? Imagine you are going on a road trip across the U.S. - but with one caveat: the entire trip you can only see ten feet in front of you. How many times would you have to back up, turn around, or slow down? How many times would you miss something because you cannot see into the distance?
The same is basically true with your life. Every year we have to back up, turn around, slow down, and start another short-sighted resolution. So what resolutions can you make that will help you keep your eyes on the future while still cleaning up the messes you have in the meantime? Here are the top five in regards to your financial plan:
#5…Plan your trip (a.k.a. SET YOUR GOALS). You won’t go far if you don’t know where you are going. What are your long-term goals? When do you want to retire? Do you want to pay for your children or grandchildren to go to school? Do you just want to stay retired successfully?
#4…Follow the scheduled maintenance (a.k.a. MANAGE YOUR RISK). Most of us would make sure we have air in our tires and the oil changed before we take a trip. We even verify our insurance coverage on our car, even if it is just liability. However, very few people take the time to protect their goals in this same way. Is your retirement plan insured? Is it at risk if a death or disability were to occur? Is your plan protected from law suits or, heaven forbid, a divorce?
#3…Fill up before you go anywhere (a.k.a. PAY YOURSELF FIRST). Remember…the young person you are today will be the only one to take care of the old person you will be some day. This one is hard to make a priority when you have so many obligations to your family, your liabilities, and your lifestyle. But just remember, every year you don’t make your future your priority, you are putting the old person that you will be some day in jeopardy. Know how much you need to invest for your future and just do it. Live off the rest.
#2…Keep your spare tire full of air (a.k.a. EMERGENCY SAVINGS). People get into debt primarily for one reason. They had this, this, this, and this come up. “THIS” happens to all of us and if you don’t have cash, you only have one option—credit. Be ready for “THIS” because it will happen. Make sure you have three to six months of living expenses set aside at all times.
#1…Build and maintain your roadmap (a.k.a. YOUR BUDGET) Have you ever used an old GPS or map that wasn’t updated with the new roads? VERY FRUSTERATING! This is just like your life, believe it or not, if you are functioning without a budget or without an up-to-date budget. How can you possibly make a financial decision if you don’t know where you are financially? We work with people who are just starting out in life to those who make seven figures a year in income. No matter the person, we preach the same thing—budget! It may seem tough, but don’t let that be the reason for your entire financial plan to break.
One final thought, imagine it is now January 2020. What would your life look like if you simply followed these five resolutions? What would it look like if you didn’t?
The choice is yours and we are here to help! Just ask us about any one of these resolutions and how to get on the fast track in 2019.