Are you a good steward of your finances? As a financial advisor with over three decades of experience, I’ve seen many differing views on the topic of money. But in all my years, one thing I’ve never heard is that it’s possible to save too much money for unexpected life events.
I always say, “Money itself can’t make you happy, but it sure can go a long way toward helping.” My friend and colleague, Carson Shadowen, elaborates on this point, stating money itself can’t make you happy, yes. However, saving enough of it creates flexibility and freedom to help you feel more secure about your financial future (a feeling very reminiscent of happiness!).
Life is full of uncertainties. It’s essential to control what you can control. The better prepared you are for life’s hurdles, the better able you’re able to navigate them.
Here are a few ways to be a better steward of your money in 2022:
- Pay yourself first. Start saving early for the future by putting money into:
- An emergency fund for a rainy day, because it will rain.
- Your employer 401(k). At a minimum, contribute at the rate of the company match to take full advantage of “free” money. When you receive that next significant pay increase, increase your contributions.
- Start a save to spend account. The premise is simple—save for what you want to spend. That next big vacation? Start saving for it now instead of paying for it on credit cards with interest later.
- Be frugal, not cheap. Focus on the value of things, not just the cost. Especially with technology, remember that early adopters often pay the price for innovation. Consider whether or not it’s genuinely worth the cost to have all of the bells and whistles.
- Live within your means. Align your lifestyle with your income, so you aren’t living in the red. Your happiness shouldn’t be defined by keeping up with anyone else–your family, your friends, or the Joneses.
- Find a balance between what you NEED and what you WANT. Wanting things is perfectly normal, but make sure you aren’t compromising your financial integrity to acquire all of life’s wants.
- Set a budget. A budget is a great way to help you manage your money. Think of a budget as a financial blueprint. Just like you wouldn’t build a house without a blueprint, don’t leave your financial future to fate. Check out our financial organizer here.
- Choose charitable contributions carefully. It’s gratifying to help those who need it most, but don’t give away everything today that you may need later.
- Invest wisely. Low interest, low-risk accounts may not grow at the rate needed to accomplish your financial goals. Without a reasonable return on invested assets, you will need more money to achieve your goals. You work hard for your money; your money should be able to work just as hard for you.
- Seek the advice of a professional you trust. We always tell our clients that we want to be in the top five people they call when they experience a life event. That’s a level of trust we don’t take lightly. By staying connected to our clients, we can help them navigate life’s changes, challenges, and hurdles to keep on the path to financial success.
- Define your legacy. Determine what you want your legacy to be to start preparing for it. Do you want to leave your assets to your loved ones? Do you want to help an organization or a cause that could benefit from your success? By defining your goals for tomorrow now, you can start preparing today.
Most simply put, money is a means to an end in this life. With proper management, guidance, and prudence, you can achieve a great deal of success.
Here’s wishing you a safe, healthy and happy 2022 and beyond!