There is no time like the present to get your financial house in order so that you can build
a solid future for yourself and your family. You’re probably well versed in the basics:
spend less than you earn, put money away regularly, fix your credit.
These are all great ways to get started, but there is more to building a solid financial life
than refusing to use credit cards and tossing $20 into a savings account every month.
Here are some key pieces of advice that you need to follow if you really want to get your
financial house in order.
Understand Your Spending
Simply putting things back on the shelf, or choosing to watch YouTube instead of surfing
Amazon isn’t enough. If you really want to curb your spending habits, it is important to
understand why you buy the things that you buy. Patrick Renovoise gave a great Ted
Talk about exactly this. In his talk he goes over how the brain processes shopping and
buying things. It’s definitely worth watching.
It turns out that there really is a psychological aspect to “why we buy.” Even people who
hate spending money come at their fiscal responsibility from a mental and emotional
place. Getting to the heart of why you shop and invest the way you do will go a long way
toward helping you stay on budget and invest wisely.
Diversify Diversify Diversify
Having a savings account is great. Putting money into that account regularly is even
better. If you really want to have a solid financial future, though, you cannot count on a
single savings account to keep you covered throughout your entire retirement (or if you
get laid off and need to live off of your savings while you hunt for a job). There is more
to a solid financial future than the dollars themselves. Knowing why you buy (or don’t),
following David Johnson of Cane Bay’s advice and building a varied and versatile portfolio
and making sure you stay valuable to your work field are also important.
This means that you have to invest in a variety of things including your savings account.
Buy some shares of stock, invest in a mutual fund, buy some real estate, etc. There are a
lot of ways to diversify your financial portfolio. Work with a financial advisor to help put
together a package that feels good and will perform well.
Maximize Your Earning Potential
A lot of people look at that tip as “find a way to bring in more money” and immediately
start searching for second jobs, freelance work, etc. That’s one strategy and, especially if
you are still at the bottom of your career’s ladder, is helpful when you need to make ends
meet.
What we’re talking about, though, is to do everything you can not just to get hired but to
get promoted. This might mean going back to school to get an advanced degree (or even
your first degree). It means talking to your boss about management and promotional
tracks within your company’s system. You want to move up within your field, not just keep
taking on side gigs while the people who were hired alongside you become your boss.
This is important for two reasons: it helps you earn more money over the long haul, which
means that your financial base will be even more solid. It also helps protect you against
job loss and prolonged unemployment. The more valuable you are and higher up you are
within a company, the less likely you are to be laid off in the first place. Even if you do
someday get downsized, you’ll have an easier time getting hired quickly because you will
have skills that are in demand.
There is more to a solid financial future than the dollars themselves. Knowing why you buy
(or don’t), following David Johnson of Cane Bay’s advice and building a varied and versatile
portfolio and making sure you stay valuable to your work field are also important.
Take these things one step at a time and trust us, in a few years you will be sitting very pretty.
