If you saved one hundred dollars and buried it 6 feet deep under your houses floor boards it won’t go anywhere. Add a biometric safe to this plan and you’re set. No one will steal it and even you’ll be deterred to not spend it because of how hard it’ll be to retrieve it. What’s wrong with this picture? You’re not thinking about inflation, investing and building a financial legacy for yourself and your (future) family.

It might seem prudent and wise to store your hard earned cash 6 feet under the ground but inflation is like the thief in the night digging away at it. Inflation normally runs at the tune of 3 to 4 percent per year. After a few years your one hundred dollars is now in double digit territory and dwindling.

Be Fearless in planning for the future and manage your expenses to the best of your ability. If you find your ability is lacking then take the time to study and increase your proficiency.

When I was growing up we weren’t rich. We didn’t have much disposable income. We ate a lot of leftovers. We shared everything and had enough pass-me-down from 5 boys and 3 girls that we clothed the neighborhood children. Because of this I had some positive influence in the importance of financial responsibility. What legacy did I want to start building and eventually leave? Sad to say I didn’t get the complete picture at first and didn’t have a plan. It wasn’t until I was 24 that I learned about compounding interest and the importance of investing for the future. I had savings that weren’t growing or making me money. They did the exact opposite actually, because inflation was sneaky. I take full responsibility of this and it taught me to be fearless in my financial decision making process. Not foolish fearless, but wise fearless.

Budgeting needs to be your foundation:

If you don’t know where your money is going on a day to day basis then you’ll end up burning through your finances. The result of this is added stress which the professionals say causes a major strain on any relationship; Wife, son, daughter, loved ones and family. Build a budget that works.

We all budget in different ways and no one method is better than the other. Some track all of their receipts and expenses to make sure they stay within their budget. Others have a preset budget for each expense area and spend out of it.  Whatever method, as long as it is helping you manage your finances in a responsible manner then you’re doing it right.

Stay Out of Debt:

This can’t be stressed enough. Debt is a killer and will restrict, end the potential of any future plans and legacy. I’m not talking about a mortgage, car payment and loans like these if you can afford it. But take on a bad loan and you won’t be applying for a mortgage and your car loan will have a crazy interest rate. I’ve heard as high as 20% before.

Do you own your finances or does your debt own you?

Don’t get a credit card if you’re a loose spender. If you do get one make sure you know the APR and pay it off each month. Not just the minimum payment but the complete balance. A friend of mine recently mentioned that he carried a revolving $5k credit card balance and made minimum payments. My first question was if he had any savings. “Of course I do”, is what he said. I asked him if he realized that his credit card interest rate was probably 2 to 3 times higher than his 401k, so he was actually losing money. It’s important to know how to prioritize where your finances go and what debt to pay off first.

Student debt is crushing our generation’s dreams and future potential. Someone forgot to tell them about what that debt will do to them when they were signing up. If you’re paying $120k for a degree that will get you a job with an annual income of $40k then you’ll be paying payments for a long time. We can’t all be picasso.

Look at the financial returns. How will it benefit my future? Is what I’m about to buy going to depreciate or appreciate in value?

Investing:

I read up on Warren Buffet and became well versed on Index Funds, stocks, mutual funds, dividends and the basic assets of any investment portfolio or 401k. I wanted to know how compounding interest worked and what it could do for me. If you’re unfamiliar with its magic be sure to read up on it.

• Employer match is a must know
• Target Retirement Funds
• Traditional and Roth IRA’s
•  401k
•  Pensions

Know your options; the choice is yours.

Educate your Children:

Your children are a part of your legacy. They are also your responsibility. As you increase your financial knowledge and abilities be sure to pass them on. Children are like sponges and the earlier you lay a proper financial foundation the more fearless they’ll be in life changing decision making.

Are you growing your wealth or growing in debt?

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