7 Questions to Wisely Grow Finances

7 Questions to Wisely Grow Finances

Perspectives are wide-ranging in what’s already been a wild election season (to say the least). For the first time in our history, an avowed socialist is finding success in a presidential bid. I recently read an interesting Washington Post opinion column stating, “A national Reason-Rupe survey found that 53 percent of Americans under 30 have a favorable view of socialism compared with less than a third of those over 30.” The column went on to say, “And as millennials age and begin to earn more, their socialistic ideals seem to slip away.” It’s not to say all Bernie Sanders voters reject a responsibility toward personal finance. I’m wondering, however, if our culture (especially the younger generation) might be scarred by the recent Great Recession and is looking to government as its savior.

This column isn’t intended to argue a political viewpoint but rather to raise 7 questions that successful people ask and answer to wisely grow their finances. Each indicates a personal responsibility and I would add that each also means little without recognition of God, our Provider, as the Owner of it all.

In a word, “early.” If not yesterday, then start today! Financially successful people let their money work for them through the power of compound interest and time.

Have a plan to prioritize your expenses: Needs first, wants second. To create a more realistic plan, track your expenses for six months to a year to help you see what you are actually spending. When you spend less than you earn, debt is avoided and savings occurs. Financially successful people earn interest, they don’t pay it.

In 2008, when the economic world seemed to be crashing, volatile emotions often led to regrettable decisions. However, people with a sense of contentment seemed to make more objective, rational decisions. Plus, success is not all about the bottom line. Contentment can lead to wisdom, purpose and fulfillment. To learn contentment, practice giving thanks for what you have. Prioritize generosity amongst the “needs” in your plan.

Everyone makes mistakes, but try to avoid the big ones as best you can. Update your insurance regularly, particularly to guard against potential catastrophic losses such as loss of life, income, or your home. Be less concerned with breaking a cell phone or the extended warranty on an appliance. Also, set aside cash savings for emergencies. And be sure to seek counsel from trustworthy, capable people for major decisions.

Prayerfully write down where you want to be in a year, five years, and ten years. I prefer to write out: 1) my goal2) the motive behind it, and 3) the plan to achieve it. Balance a focused pursuit with flexibility. Of course, seek wise counsel in this too. Selectively take advantage of employer benefits to help attain your financial goals.

When it comes to long-term planning, take inventory of your unique options to invest: 401k, IRA, real estate, etc. From your options, develop a priority list and work your way from top to bottom based on how much money you have to work with toward your goals. You might develop your priority list by asking: What has added benefits like an employer matching contribution? What will save you taxes? Two cautions: don’t put all your eggs in one basket and don’t try to secure your entire long-term future hastily. “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.” — Proverbs 21:5.

As Stephen Covey says in The 7 Habits of Highly Effective People, “Begin with the end in mind.” Success is not measured by the largest bottom line. As part of your greater legacy, consider training your children to handle money wisely and plan for their educations. Determine the importance of leaving an inheritance to family, community, and charity. Like all of the questions above, more in-depth planning will likely be necessary.

But for starters, think on these things and take time to answer seven questions…

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