This week’s Mullooly Asset Management Podcast focuses on some of the building blocks of financial planning. Two very important factors in financial planning are saving and budgets. Tom’s favorite quote about financial planning is pretty simple, in fact it’s only three words. You need to SAVE MORE MONEY! This is the number one thing that people need to do a better job of. Saving more than you spend is financially wise.
Although saving and budgets are fundamental pillars of financial planning, many people don’t like to save money and dislike the idea of budgets. Saving money isn’t popular and is somewhat counter-intuitive. We live in a culture where people are always looking for a bigger house or a nicer car, but never thinking about saving more money. In 2007, people in the United States actually spent more than they earned. That means that people were spending more than their gross income!
Financial planning starts with saving. There is certainly a stigma attached to saving money, and it isn’t a good one. Saving needs to be looked at differently because for most people it comes with a negative connotation, like the word diet. Instead of saving you could think of it as, “paying yourself first”. By changing your attitude towards saving it might seem easier to accomplish each month. Set a goal to save each month, not just whatever is left over after paying the bills. This is the first step in having a financial plan.
Spending and saving are both habits, so don’t allow yourself to become a slave to debt. When you have money saved, it allows you to make smarter and better decisions.
If you feel lost and think you need to do some serious financial planning, you should start by paying yourself first. Listen to this week’s Mullooly Asset Management Podcast and learn how you can start saving today.