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Posted on December 17, 2018

Ignorance Is Bliss

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By Morgan Snow

Have you ever been so intimidated by something that you choose to ignore it in hopes that it’ll go away, but in return it ends up creating a bigger issue? It’s like the saying, “Ignorance is bliss”. There was a study conducted by U.S Bank that CNN published (read full article here)  where only 32% of households maintain a budget; that is 3 out of 5 people that don’t! In addition, 70% of Americans don’t even have $1000 in their savings account.  If this describes your situation.. just know you are not alone, and be assured that it is never too late.

The best news is that you don’t have to be overly educated or know the investment and financial world inside and out in order to improve your finances; that is what Financial Advisors are for. You just must be willing to change your habits. I talk a lot about how financial planning is similar to personal training, which was my background for ten years prior to joining Signal Wealth Advisors. Changing habits don’t happen overnight, they happen by making small goals and gradual steps toward change.

These are a few useful tips for starting to get control of your finances:

  1. Link your accounts with a budgeting software. Here at Signal Wealth we use eMoney which is fabulous for our clients, but there is also a program called mint.com that can help you start with the basics. You just plug in your bank accounts, and whala, it categorizes your spending and sets budgets for you. You can customize them based on your goals and your lifestyle.
  2. After you set up your budget and look at your spending, find one thing in your life that you can cut back on and use the extra funds to either pay off debt or start saving.
  3. Pay off debt in the order of highest interest rates vs. long term debt.  (example; credit card debt with a 22% interest rate would come before making extra payments on your home paying 3.75% interest)
  4. Lastly, don’t spend money you don’t have. Live within your means, surround yourself with people who are in similar situations as yourself, or where you’d like to be, who have your same values and habits.

I once was in your shoes where I dreaded the expense of Christmas… presents for your significant other, your parents, siblings, their spouses, their children, grandparents, friends, dogs…. oh and don’t forget the stocking stuffers.  I remember going to Walmart to pay for my very last Christmas item.  The overdraft in my bank account was maxed, and I had no money to pay for it. I had to leave the item with the cashier, and I cried the whole drive home. After that point, I decided I would never have a Christmas like that again. I decided to prioritize who I was giving gifts to, and the amounts I would spend. I started creating a budget and knew where my money was going, how much I had left after I paid my bills, my debt, and still had some for savings. When I got control over my finances everything else in my life seemed more manageable and now, I am lucky enough to get to share my experiences in hopes that I can help others face the problem that is the most intimidating but important in their life.

Click here to take our Retirement Readiness Quiz and get an idea for where you are today.

 

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