It's understandable if things might feel a little bit … shaky right now for you. If you pay attention to the media, you are seeing trade wars with China, uncertain stock markets, apocalyptic elections rumbling in the future, even the Apple juggernaut is seeing its empire show signs of trouble.
All of these, by the way, are good reasons to fight for your own personal clarity in the midst of trouble all around.
So, we press into what we CAN control, and that's your personal financial foundation.
The tax return is filed, so it's the perfect time to assess what went well, what didn't, and if you're content with the outcome. There are a number of things you can start doing today so that next year is your best, most tax-efficient (and saving) year to date.
I wouldn't be doing my job if I didn't suggest a good next step: give me a call: (251) 633-4070. We will help you set a game plan for the year ahead. Taxes are only getting trickier, and it helps to have someone with you in the trenches.
Leaving the tax component aside, it's also a good time to examine where your money is going.
Are you frugal? Do you spend at will? No matter where you fall on the spectrum, there are a few ways you can direct your cash flow so that you can benefit in years to come.
After all, it's never too late to begin money-friendly habits.
Richard Lindsey's Three Building Blocks To Healthy Personal Finances
"There is a gigantic difference between earning a great deal of money and being rich." -Marlene Dietrich
The first part of your personal finance foundation is actually the absence of two poisons: taxes and debt.
Both of those words might sound like nails on a chalkboard, and that's exactly why you should pay off both as soon as you can. We've talked (and do talk, and will talk) about taxes a good deal, and it's no secret that paying taxes is your duty as a citizen. In addition, we spent the last few weeks discussing ways you can pay and the penalties that come for those who don't.
Pay your taxes. Do it.
The debt piece is obviously more nuanced from person-to-person. Undergrad, grad school, credit card, car, home, etc. The (odd yet accurate) analogy of eating an elephant comes to mind — one bite at a time.
Debt is another item I'd love to chat about with you, as we can assess after-tax interest rates and how they might affect potential investments. If you've ever ridden yourself of debt before, you know the ensuing freedom. I want that feeling for the entirety of your financial picture.
The second block: Hold Wisely
Once the word "debt-free" is within reach of your vocabulary, the real fun begins. What's the real fun, you ask? It might sound nerdy … but saving and investing are two keys to financial wealth and freedom.
We've discussed ways you can save and invest before, but again — you are never too late for either.
Remember, post-tax season offers a fresh start. Let's make it count!
The first question I'll ask: Do you have an emergency fund established? This is key to your savings account. It should contain three to five months worth of savings, because life is full of unexpected costs — car accidents, medical bills, stolen items — it's important to play safe. After that is established, then you can save for future costs like a new car, home, and so on.
Investing is another beast … one that can lead to meeting your financial goals way quicker. If you are not a professional, I strongly recommend sitting down with one to discuss investment opportunities for you and your family. The small cost of a meeting leads to big gains in the future. Ask around for some trusted referrals. A trusted Mobile, AL financial planner could be essential for your financial success moving forward.
The final block: Spend Generously
And I don't exactly mean spend everything you have. Clearly, I led with two things you should do first with your money: pay off taxes/debt and save/invest after you do. But this third step is inevitable — we spend money (most) every day in some form or fashion.
Where are your dollars going?
What is the ratio of money you spend on yourself vs. money that is donated to Mobile, AL organizations or people you believe in? One of the most life-giving components to saving and earning money is so that you can help others in the process. What if someday you could invest in someone's start-up business so that they could pursue their dream? What if you could bless your children and help them with college tuition? There are plenty of ways to spend, but one of the best is on others.
But truly, it is your hard-earned money after all. How you spend is entirely up to you. And it's a good time when you can treat yourself every now and then. You are human after all. Just remember that when the aforementioned steps are done first, treating yourself to a new ____ will feel much more special.
This whole subject of personal finances boils down to prioritization. Reversing this order of operations isn't illegal, but in the long run … it might be detrimental.
Give me a call today and let's dream about your new, free financial future.
Lindsey & Waldo, LLC