Saving Money for Your Future

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“The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese Proverb

What if we could go back and plant a tree in a home before we bought it? Can we envision the shade that years of comfort the tree might stand for? If you could go back and tell a younger you what to do financially to give you a better today, would you? Of course, we have all thought about the what if’s and then settle on the fact that “hindsight is always 20/20”.

Better Ways to Think About Money


Dealing with money, or more specifically a scarcity of money, can be extremely frustrating and stressful. If you are frequently dismayed or surprised at how little money you have, this article is speaking to you. If you are starting to worry about the future and where you’re going to be 30 years from now, you are the audience for this article. We’re going to talk about three ways you can improve the way you view and handle money: thinking about the future, spending money vs. investing money, and why interest is the devil.


Think About the Future

As you’re making decisions about where to spend your money, no matter how in-the-moment those decisions may be (e.g. whether to pick up breakfast at McDonalds or scramble a couple of eggs at home), in order to make a good financial decision you need to have the future in mind when you make it. When you’re considering buying a new smartphone, ask yourself if you’ll be wishing you had that $400 a few months from now. Try to think about purchases in terms of a monthly budget. If you think in terms of how much money you’re spending on average each month on something, it becomes much clearer where all your money is going. For example, if you spend $600 on the newest iPhone each year, you are actually paying an average of $50/month for your smartphone, plus however much you are paying for the data plan. A $600 one-time expense doesn’t sound so bad, but $50/month sounds pretty pricey. You might forget in December how much money you spent on your phone in March, but it’s still affecting your budget.


Investing Money vs. Spending it

The difference here is pretty obvious – when you invest money, you get it back in some form at a later date, often with even more along with it because it increased in value. When you spend money it’s just ‘poof’ gone. People often make the mistake of assuming that electronics are an investment because you can resell them later after using them for a few years. Getting $200 for your used iPhone that costed you $600 two years ago is not an investment; it’s an attempt to recuperate some of the cost of the phone. Don’t get me wrong, selling used electronics is a good way to make some of your money back, but it’s not an investment.


But let’s talk about this in a little more depth. If you’re a blogger like me, then spending money on a nice laptop can definitely be an investment. Why? Because my laptop is what enables me to make my money. An electrician buying his tools is investing even though the tools themselves will depreciate over time. The tools enable the electrician to make more money. When you are making decisions about how you use your money, focus on using the money on things that are going to make you more money. When you do spend money, focus on spending money on things that actually solve a problem that you are having. For example, the touchpad on my laptop is pretty good, but it can’t compare to a regular mouse, so I bought a Bluetooth mouse and now I can get work done faster and with less trouble. Start the purchase process with the problem, and make the purchase your solution to the problem. If you really want something but can’t think of a problem you have that it solves, it’s not worth it and you’ll probably regret the purchase afterward.


Interest is the Devil

My father is fond of saying, “There’s two kinds of people in this world: those who pay interest and those who collect it, and the latter drive nicer cars.” This is exactly right. For you as a consumer, interest is your greatest enemy and most fearsome nemesis. I recently read that the average indebted American household has around $15,000 of credit card debt. Considering that even decent credit cards have interest rates of like 14%, that’s over $2000 per year of money completely flushed down the toilet on nothing but interest.


Interest is the price of a product that never arrives. Every dime you pay in interest is a dime you wouldn’t have had to pay if you had chosen differently. Granted, there are some situations (specifically housing) where paying interest on a mortgage is better than spending money on interest’s equally evil cousin: rent, but those situations are few and far between. Run away from interest as fast as you can, and only make a purchase that will bring interest when you absolutely must and there’s nothing you can do about it.


If you want to get a handle on your finances, start by thinking about the future and in terms of a monthly budget, then make sure you are investing money instead of spending it every chance you get. Focus on buying solutions to problems, rather than just buying cool stuff or things you want. This can even apply to clothes and shoes (buying brown dress shoes to go with your brown dress clothes is better than buying brown shoes because you like them). Last, avoid interest at all cost. If you incorporate these principles, your finances will get better fast.


This is what holds true for personal finances. This video will describe ways that we can all start setting money aside and think long term and open our eyes to looking at a budget. What are you investing in to build your financial future? What are you saving for? Answer these today and you will know yourself and your future better.


7 Steps to Improving Your Finances

Getting into your own home is one of the biggest financial events (and commitments) of your life. For the great majority of Americans, getting into a home requires planning, thought, and preparation.

Most of us need a financial partner to get into that home. So we look for a lender we can trust, someone with a proven track record, someone knowledgeable and professional that can attend to all the details so we don’t have to. 

Getting the right financial partner is key—and that is why I’m recommending to you veterans for your  VA home loan mortgage needs. Having the right partner is half the job; the other half is to get your financial house in order. The better kept your finances, the greater your options in working with a lender.

Here are seven things you can do to get your financial house in order.

First:  Organize Your Spending

It’s really no fun to sit down and go over finances. But the willingness to perform and audit, to see where your money is going and then evaluate those choices, is the start of something big.  Pull your bank statements and/or credit card statements for the last twelve months, get out a pack of bright colored highlighters, and organize your spending into categories. Prioritize things! Be sure to pay yourself first with a direct deposit into savings and retirement accounts.

Second: See Yourself Bigger

One of your largest assets is your earning power. Almost everyone has certain skills or interests that come naturally. Believe in yourself a little more. Start small and convert that skill or interest into a revenue stream. Some of the most successful people begin modestly with something that they have a passion for.

Look for ways to add value to your work, and don’t be afraid to ask for a raise or bonus for your contributions. If you are not being paid what you are worth, then see what other opportunities may be available to you.

Third: There’s Gold in Them Thar Hills, uhm, Closets!

Ever play hide and seek? Sure you have. It’s time to play it again. But this time you are going to find stuff that is hiding right under your nose. Look for old cameras, furniture, clothing, knick-knacks: anything that you can list on Craigslist or EBay. Hundreds and sometimes thousands of dollars are hiding in the nooks and crannies throughout your house.

Also, pay your folks or the in-laws a visit. They may have saved a lot of that “old stuff” from your earlier years. Often these items are a gold mine you forgot you had. You can sell them and use that money for something that will bring you more enjoyment.

Fourth: Sharpen Your Investment Strategies

Your investments deserve a plan. A plan means you have made an intelligent decision about how much of your money should be in cash, equities, and bonds, and then within each of those categories which sub-class it should be in such as international equities, small cap, or emerging markets.

Managing your different accounts means that you rebalance them according to economic conditions so the right amount is in each category. If you have money in both pre-tax retirement accounts and after-tax brokerage accounts then it may make sense to put bonds in pre-tax accounts to make your portfolio is more tax efficient.

Fifth: Hire Professionals When Needed

Having certain things done for you is a solid strategy, especially when it means getting things done right.  You can read books about investing and hunt and peck all your life for a little extra scratch in the soil. Or, you can look around, ask around, and find a great financial partner that has a history of maximizing investments.

When you know it needs to be done, but you aren’t going to get it done yourself, hire the right people to do it for you. Before you hire someone to get your finances in order, decide what you need from them. Financial planning, investment advice, and retirement planning are separate services. Talk to people you trust, determine which type of services you need, and interview several people before picking one. Go slow and don’t get talked into anything. Don’t play Russian Roulette with your money.

Sixth: Swab the Decks, Matey!

A ship is in order when its decks are clean. With finances, you may not enjoy some of the seemingly thankless tasks that constitute housekeeping. But keep house! A little discipline goes a long way. If you eat out once less per week and bank it, a simple little choice results in hundreds extra per year.  See how much you can save. Then, if it makes sense to do so, snip off a portion of that as “mad money” and reward yourself with something modest but motivational that you really would not have expected to get under “business as usual.”

Seventh: Hit the Library

Hang up the video games, the online activities, the social media, or whatever else is stealing hours from your day. Give up something good to get something better. Apply yourself by reading, by learning something new. Find a way to apply it. Learning is a life-long process. You can increase your income and your savings by reading and committing to an ongoing process of learning. Choose a topic that will advance your career. Choose a subject that will advance or assist your fellow man. Give something back. You’ll feel a lot better about life and about yourself.

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*Annual savings calculator based on 2015 monthly average savings extrapolated year-to-date.