A while back I started going to the gym to improve my physical fitness. When I arrived at the gym I noticed there were basically two types of people at the gym. The first group were people who had worked hard and transformed their bodies and were working to maintain it. The second group were people (like me) that were trying to take their current body and turn it into something better. Everyone at the gym had a different view of what a health body should be, and how to get there. Some people wanted to have big muscles, others wanted to lose a few pounds, and still others (like me) just wanted to be able to go on the treadmill for 30 minutes without having someone perform CPR on me.
There is no "One Size Fits All" in physical fitness or in financial fitness. We are all on a journey through life and experiencing different circumstances, income levels, spending habits, and challenges. If a person wanted to train for a marathon they would probably work on the treadmill to improve their cardio system. They would not want to gain weight or build up their biceps, because that would not help them meet their physical fitness goal of running a marathon. You have to do the right physical exercise to works towards the right physical fitness goal.
This same concept applies to financial fitness. You do not need to be continually adding to your emergency savings fund if you already have one. Instead you only need to make sure it is being properly maintained and replenished. You have to make the right financial decision to work towards the right financial goal.
We all have to be aware of our own stage in life and set realistic financial goals. A young couple that just got married and is expecting their first child will have different financial goals and needs than a couple that started retirement. That means when you are looking at your current stage in life and determining your financial goals think about setting short term, intermediate term, and long term goals. Just like the young couple expecting their first child you might need to look at short term goals like funding diapers and formula. Then you also have to keep in mind that one day they may need an investment in their education. Then one day your children leave home you will need to think about your retirement, but if you put that off too long it will be hard to catch up. Just remember to be flexible and be prepared to change your financial goals as you move through your stages in life.
Just like in physical fitness we all know there are exercises that improve certain muscle groups. If you only work on your biceps and never work on your leg muscles. Your body will look out of balance with your huge arms and tiny legs.
When you work on developing your financial goals understand that working on different goals (like emergency saving, college savings, retirement savings, and investments) can improve financial security in one area, but limit growth in others. There is no one size fits all way to get financial security, so determine what your financial security looks like and work towards that goal. Just like when you hire a personal trainer, an AFC® (Accredited Financial Counselor) can come along side you and help you develop a plan to improve your family's financial security. Then the AFC® will work with you on a regular basis to help you monitor your progress and reassess where your stages in life change.
If you are looking for a Financial Consultant that can work with you to develop a strong strategy for next year - contact Stephen Westurn (214.240.0701) or Stephen@Westurnconsulting.com for a complimentary session. Check out the website: www.Westurnconsulting.com .
Guiding People Towards Financial Security