As I survey the lives of many of my clients, I notice a very interesting pattern. 90% of people don’t have a clue on how to plan for their futures. Many of them had never even thought of seeking financial advice for their futures. They were just living for the present.
We can’t always live in the present just like we can’t always live in the past or the future. There needs to be a balance between the areas to which we dedicate our thoughts. When talking about the past, all you need to take from it are the lessons that you learned. The present is your life lived on a day by day basis. The future is what all of your present actions should be aimed towards.
You can apply the same thinking template to your finances. Your present financial situation is the result of the past actions that you’ve decided to take or not take. If you’re not happy with your present situation, what are you currently doing that is different from what you’ve been doing? And what do you need to do to get to where you want to be?
If you want to get different results in the future, you have to realize that repeating your past actions won’t get you those different results. Those past actions have gotten you to where you are and if you want to be in a different position in the future, you must change those patterns.
To properly plan for your finances, you have to first look at your any debt that you may have accumulated. Do your savings outweigh your debt? Do you even have any savings? Are you prepared to pay for your kids’ college tuition? Are you prepared to comfortably retire? Is your family protected from all of your liabilities if you’re not around to take care of them? Are you making the type of money you need to pay for all of these liabilities?
Be willing to answer all of the above questions with honesty or be prepared to deal with them later on in life when they’ve gotten more serious. If you see that there are any areas where you need help, the next obvious step would be to seek help.
In regards to debt, the first step is to provide your family with the protection needed to cover all of your liabilities such as the mortgage, credit card payments, etc. so that they are all accounted for if you’re not around. Then you must concentrate on getting rid of all of your bad debt. Only then will your income actually belong to you and not the creditors.
The next move is to prepare yourself for retiring comfortably with your wife. Use the previous debt payments as contributions towards your retirement fund. Also use them to prepare for your children’s college costs, if you have any children.
I’m sure you’d agree with me that all of these things are going to cost you some money. Are you earning enough to be able to get rid of your debt, save for retirement, provide protection for your family, and send the kids to school?
Looking at the statistics of our country, the majority of people can easily admit that they’re not making enough money. Those same people believe that to make more, they either need a second degree or a second job. Christopher Columbus didn’t discover this beautiful country for you to go out and get a job.
The majority of the wealthy people in the US didn’t start out in that position. They first understood that they need their own business so they started one part-time. Then when their business income supplemented their job income, they quit their job and concentrated fully on their business. Learn to do the same and you can build the same type of wealth they did, if not more.