Why Simple Financial Strategy Works

Photo by John-Mark Smith on Unsplash

In life and in finances, simplicity is underestimated.

The truth is, simple things get done, the complex usually don’t.

In the end results matter so getting things done isn’t optional.

Within finances, having a complex “master plan” can be overwhelming and lead to paralysis. (Not to mention unnecessarily costly)

Rather than fixating on the massive master plan, simply take the first step or begin with the most important action.  By getting the first step right you’ll be setting yourself up to powerfully take the second step.

Said another way, doing the most important and obvious things first, you lay a solid foundation.

Anything large starts as something small. In fact, the complex is merely made up of many simple, interlocking parts.

Photo by JJ Ying on Unsplash

In finance the first steps may be obvious, but not glamorous. Take them anyway.

For example: begin saving 10% or more of your income AND NEVER STOP.  As your income increases, your 10% savings should too. This seems obvious, but many won’t take the time to carry it out.

If you don’t have one, then use that money to build up your emergency account. Start with 1 to 2 months worth of expenses so that you can begin building peace of mind and confidence.

Next comes another simple step: if you have inefficient debts (anything over a 7% interest rate) begin using that “savings” to pay off the debts.  Paying off a 17% credit card has the same impact on your bottom line as earning 17% in an investment… WITH NO RISK. 

Paying off bad debt isn’t sexy, but it’s incredibly effective. Don’t skip this step.

Once the bad debts are paid off, continue to save until you have 3-6 months worth of expenses.

Again, this is simple but it continue to build your confidence and help your mindset become one of abundance rather than fear or scarcity.  This is a HUGE shift.

If you simply continued to save 10-20% of your income, and never invested a penny, you’d still end up ahead of 80% of people in our country by retirement.

It won’t make you uber rich, but this plain and simple practice will single handedly change your life.  It takes time, but even with no other action it works.

Photo by Aron Visuals on Unsplash

Of course, once you’ve begun to build up savings things can get more complex, but only if you let them. You’ll want to put your money to work earning for you, but that can be a large learning curve.

The truth is developing a financial strategy doesn’t have to be tricky, but with so many people looking to “help” you manage your money, it can be difficult to determine which way to go.

Some will show you intricate plans with many moving pieces and in depth flow charts. Others will ask you to hand them your money and never look at it until retirement.  Neither of these is a good idea because if you don’t understand what’s happening, it’s easy to lose confidence or get bamboozled.

The good news is that you CAN keep wealth building simple and allow yourself to focus on what’s really important: your loved ones, your health, and your work. If you get those right, you’ll be winning the game of life!

---

LIKE WHAT YOUR READING? THEN YOU’LL LOVE OUR VIDEOS ON YOUTUBE. YOU CAN WATCH HERE>>>

If you’re ready to let go of all the complexity and simplify your finances, we can help.  Our focus is to get money out of the way so that you can live your biggest life. If that sounds like what you want, let’s talk.

You won’t get a bunch of technical jargon or smoke and mirrors. Just a clear, easy to execute strategy that fits your lifestyle and will help put your mind at ease, so schedule a free conversation here…

A Savings Strategy that Works...

Everyone knows that saving money is important. We all understand that it is the basis of creating financial stability and a prerequisite to having money to invest. Yet, the vast majority of people in the U.S. aren’t saving anything!

In fact, according to CNBC, a staggering 78% of full time workers said they are living paycheck to paycheck.  In case you don’t speak “financial jargon” I’ll translate: they aren’t saving.

I’m sure they WANT to save, but they just can’t seem to do make it happen.

It’s seems understandable because we all have car repairs, home maintenance, activities for the kids, and everyone NEEDS a 75 inch TV, right? At some point you’ve probably felt like every time your are about to get ahead, something comes up and you are back where you started.

Sound familiar?

If you are part of the 78% (or even if you aren’t) then its time to listen up because this simple skill of ‘saving’ is literally the difference between people who become financially independent, and the other 78%.

Now, before you say anything, I’m going to tell you something you don’t want to hear. The difference between financial success and a double digit bank account is NOT about how much money you make.

Seriously. It’s not.

How much money you make DOES matter, but it’s not the MOST important factor once you get above the poverty line.

I’ve worked with a LOT of people that make over $500,000 a year that are BROKE.  Yep, they are living paycheck to paycheck just like everyone else.  That may seem impossible, but its true.

In every single case I encountered, it is because they NEVER LEARNED HOW TO SAVE.

The reality is, if you never learn to save, then you are “learning” to spend every dollar you make. Its that simple.  As you make more, you spend more.  Its very easy to spend an extra $10, 20, 50k a year by simply having a slight nicer house, car, vacation, and eating out a little more often.  

So, by the time you are making $40k a month you have a really nice house, kids in private school, some great trips in your photo albums, and 2 beautiful cars in the garage - but ALMOST NOTHING in the bank.  

Simply put, saving needs to be a first priority and a conscious effort or it rarely works.

That doesn’t mean it needs to be grueling or difficult, it just needs to be planned and intentional.

Here’s the simplest way to begin saving right away:

From here forward, immediately set aside 20% of every dollar into a savings account. (If you can’t do 20% right away, then start with 10%) Don’t wait till the end of the month, instead transfer the money as soon as you get paid.  You may of heard the phrase “pay yourself first”, this is what it means.

Most people make the mistake of trying to cut back spending all month and save whatever is left. If you’ve ever tried this you know IT DOESN’T WORK. I’ve personally talked with 1000’s of people who’ve tried it, and the answer is always the same, “There is never any left”.  

Bottom line: you have to SAVE FIRST and learn to live on the rest.

Even if you are barely making ends meet, begin putting the money in the savings account. If you save first, you’ll begin to strengthen your ‘saving muscles’. You can always pull the money back out of savings for an emergency, so don’t let fear keep you from learning to save.

Soon enough you’ll begin to see the money build up in your savings account and you’ll be on your way!

The best part is that seeing your savings account grow gets REALLY EXCITING!  It takes time, but watching the balance go up each month will reconfirm that you are doing the right thing and help you stay on track.

If you do this, then as you make more, you save more.  More importantly, it becomes a habit that will serve you the rest of your life!

Having money in the bank means you get better loans and interest rates, you don’t have to put emergency expenses on credit cards, and you won’t ever get backed into a bad situation because you have a “safety net” in your savings account.

So if you aren’t saving 20% of what you earn now, its time to start.  In fact, if you can automate your savings by having your bank set up an automatic transfer or a sweep - that’s even better!  Once you get started you’ll be amazed at how fast things change!

LIKE WHAT YOUR READING? THEN YOU’LL LOVE OUR VIDEOS. YOU CAN WATCH AND SUBSCRIBE HERE>>>