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5 Basic Steps to Begin Your Financial Journey


Why didn’t they teach us about money in school? I have been asking myself this question ever since I left college and entered the work force. It’s mind-boggling to me that we learn about everything else in school except money. Why wouldn’t they include a class about money at least as an elective in our primary education?  When was the last time you used the French that you spent 3 semesters learning? We make decisions every day about money. Whether it be about paying our debts, buying a home, or just deciding whether the $2.50 lemonade with lunch is really worth it. Having some basic education around personal finance topics like budgeting, saving and investing, debt management, and government programs like Social Security can only better prepare us for the next chapter in our lives. Even at a very young age these subjects can be introduced in a light, fun sort of way. With some of this knowledge, I may have made some different choices around what college I attended, how much student loan debt I was willing and able to take on, and researching the various grants, scholarships, and government programs available to me. 

It wasn’t until late in my college career when I had to decide on what my major was going to be, that I discovered the world of finance. I figured since I didn’t know what I wanted to be, I might as well learn about finance so I would know how to handle my money no matter if I was a firefighter, teacher, or barista at the local coffee shop. Having a basic understanding about money should be second to understanding our health. Study after study has shown having control over your health and money leads to a better quality of life…

  • Your stress levels are more manageable
  • Your mood tends to be more positive
  • There’s less likelihood to display aggressive behavior
  • You are more productive at work and at home
  • You have better credit
  • You maintain a better relationship with your spouse and children

I’m sure you have experienced many ups and downs when it comes to both your money and your health. The key is to set goals, prioritize, and prepare for unwelcome surprises. Have you ever flown in a plane and seen a picture of the flight map on the screen in front of you? Imagine there was no map. Or worse yet, no radio controls or GPS. Would you trust the pilot could get you to your destination? What if he encountered severe wind or unexpected, dense fog rolled in? Money is no different. We all go through various tailwinds and headwinds from time to time. Developing a plan that accounts for these fluctuations will give you a more enjoyable flight and get your plane to land safely on the ground and at the appropriate destination. 

Here are 5 simple steps you can take to “lift off” as you embark on your financial journey:

1. List Your Income and Expenses & Develop a Spending Plan – I suggest taking a look at these figures over the past 3 months and over the past year. It will give you a snapshot of how you’re doing in terms of spending within your means. Using this data you then want to develop a budget each month to prevent you from overspending. When you don’t keep track, it can lead to unwanted credit card debt, unmanageable payments, bad credit, and deter you from growing your wealth and living a life you love. HELPFUL WORKSHEET #1

2. Identify Your Assets and Liabilities – All you need is 2 columns. On the left you have all your items of value…home, savings accounts, investments, 401ks, and IRAs to name a few. On the right list out who you owe money to...mortgage, car loans, student loans, credit cards. Subtract the right side from the left side and you have your Net Worth. Pretty simple. HELPFUL WORKSHEET #2

3. Set Some Goals – Set 3 goals you would like to accomplish in the next year and in the next 5 years and what small steps are necessary to achieve them. For example, say you want to save to buy a home in 5 years and you’re going to need $25,000 for a down payment.  To keep matters simple, let’s assume you earn 0% on the money you save. $25,000, divided by 60 months, equals $416.67 per month in savings. Lastly, don’t forget to reward yourself. For each goal, specify how you will be rewarded so that you can keep your “eyes on the prize.” Think vision board. If you’re a visual person like me, print out some pictures of what accomplishing your goals will look like and place them somewhere you will see them often. It’s amazing how powerful our subconscious mind is so make sure you exercise it.  

4. Create a Savings Plan – The key is to start small and save on a monthly or bi-monthly basis. You don’t want to overdo it and then decide it’s too hard and give up. As time goes on and you get more comfortable, make small increases to your monthly savings amount. Another tip is to put the money in an account that you don’t have easy access too. The last thing you want is to be tempted by the next hot gadget or the 20% discount at your favorite clothing store and go back to start, not pass go, and not collect $200. An easy way to do this is to ask your banker to de-link your savings account from your online access and debit card. “Out of sight, out of mind.” 

5. Monitor the First 4 Actions at Least Annually – Although I suggest quarterly. The more you pay attention to your finances, the more control you will have. Just like exercise and diet, the better you monitor your weight and what you eat, the more likely you will maintain a healthy lifestyle and produce the results you are looking for. There are several online tools that can help you with all of the above. Use your calendar to create reminders and set the time aside for these tasks, and treat those events like an important meeting or job interview. 

Even though I may not have had “Assets and Liabilities” as an adolescent or young adult, having a basic education around finances would have set the foundation for the years that followed in helping me with some important life decisions. I can’t count how many times I sat in a math or science class and wondered, “When am I ever going to use this?” only to find the application later in life.