Tips to Combat Burnout

March 3, 2021

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Denise and Chris Arand

Denise and Chris Arand

Executive Vice Presidents/Financial Strategists

2173 Salk Ave
#250
Carlsbad, CA 92008

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January 20, 2021

What All Early Retirees Have in Common

What All Early Retirees Have in Common

Early retirees track both their net worth and annual spending… and you should too!

Why? Because those two pieces of information are critical to evaluating your current financial situation and understanding what separates you from your financial goals.

Retiring early takes meticulous preparation, a willingness to sacrifice temporary comfort, and consistency. Every financial decision must effectively move you closer to your goal or you run the risk of failure.

Ignorance about your net worth hampers your ability to make certain financial decisions wisely. It may cause you to save less, if you assume your net worth is closer to your retirement goal than it actually is. When the time comes to retire, you’ll be in for a shock!

Failing to monitor your expenses can lead to a similar outcome. What if you never identify the expenses that eat up the majority of your cash flow? You might swear off lattes or designer clothes, but you might miss bigger saving opportunities. There’s a reason that so many early retirees cut back on housing, transportation, and food–they’re the biggest drains on cash flow!¹

Here’s the takeaway—imitate early retirees and regularly evaluate your net worth and spending, regardless of when you plan to retire.

Knowing what you’re worth and what’s eating up your cash flow empowers you to make effective decisions that bring you closer to your lifestyle goals.

What’s your financial status? How close are you to achieving your goals? And what’s standing in your way?

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July 8, 2020

It may not be as hard as you think

It may not be as hard as you think

Once upon a time, a million dollars was a lot of money.

And it still is. If you time it right, becoming a millionaire might be within reach for nearly anyone. There are some catches, however – you’ll have to stay focused, and time plays a significant role, so starting early is part of the millionaire game.

Time is important because you’ll use the leverage of compound interest to help build your nest egg. For example, let’s assume an average rate of return of 8% in a tax-deferred account, like an IRA or a 401(k). This 8% example is lower than the historical return for the S&P since its inception in 1928. Historically, the S&P has rewarded investors with about a 10% average annual return, including dividends.[i]

Then let’s assume your current savings are at zero. Let’s also assume that you can find $100 per month in your budget to invest. $100 per month is about $3 per day.

Starting your account with your first $100 and then contributing $100 per month (every month) will yield the following amounts, assuming that your account’s returns stay at the 8% average:

  • After 10 years, you’ll have about $17,600\
  • After 15 years, you’ll have about $33,000\
  • After 20 years, you’ll have about $55,000

Uh oh. None of those numbers are even close to $1 million. To reach $1 million by saving $100 per month, you’ll need 55 years at the 8% rate of return, at which time your account would be worth approximately $1,025,599. (By the way, the account would grow by $75,000 from year 54 to year 55 since your compound growth would be based on a much bigger number.)

If you can step up your investment to $150 per month, you might be able to shave five years off your goal and reach $1 million in 50 years. At $200 per month, you might reach your goal in just over 45 years.[ii]

Looking at these numbers, ask yourself how much you can save each day. When you spend money now, it’s gone. It never has a chance to grow. By saving (and investing) instead of spending, you can help set yourself up for a comfortable future where you can afford the treats you’re skipping now so you can fund your savings.

At $15 per day – the price of dinner at a fast food restaurant – you could save $450 per month, enough to make you a millionaire in just over 35 years.

The market refers to the process of investing a consistent amount monthly, regardless of the price of shares, “dollar cost averaging”. Let time take care of the math through compounded returns. Just keep saving for your future consistently.

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Market performance is based on many factors and cannot be predicted. This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies for saving and/or investing that may be available to you. Before investing or enacting a savings or retirement strategy, seek the advice of a financial professional, accountant, and/or tax expert to discuss your options.

[i] https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
[ii] https://www.investor.gov/additional-resources/free-financial-planning-tools/compound-interest-calculator

June 17, 2020

3 Ways to Shift from Indulgence to Independence

3 Ways to Shift from Indulgence to Independence

On Monday mornings, we’re all faced with a difficult choice.

Get up a few minutes early to brew your own coffee, or sleep a little later and then whip through a drive-thru for your morning pick-me-up?

When that caffeine hits your bloodstream, how you got the coffee may not matter too much. But the next time you go through a drive thru for that cup o’ joe, picture your financial strategy shouting and waving its metaphorical arms to get your attention.

Why? Each and every time you indulge in a “luxury” that has a less expensive alternative, you’re potentially delaying your financial independence. Delay it too long and you might find yourself working when you should be enjoying a comfortable retirement. Sound dramatic? Alarmist? Apocalyptic? But that’s how it happens – one $5 peppermint mocha at a time. This isn’t to say that you can’t enjoy an indulgence every once in a while. You gotta “treat yourself” sometimes, right? Just be sure that you’re sticking with your overall, long-term strategy. Your future self will thank you!

Here are 3 ways to shift from indulgence to independence:

1. Make coffee at home. Reducing your expenses can start as simply as making your morning coffee at home. And you might not even have to get up earlier to do it. Why not invest in a coffee pot with a delay brewing function? It’ll start brewing at the time you preset, and what’s a better alarm clock than the scent of freshly-brewed coffee wafting from the kitchen? Or from your bedside table… (This is a judgment-free zone here – do what you need to do to get up on time in the morning.)

Get started: A quick Google search will yield numerous lists of copycat specialty drinks that you can make at home.

2. Workout at home. A couple of questions to ask yourself:

1) Will an expensive gym membership fit into your monthly budget? 2) How often have you gone to the gym in the last few months?

If your answers are somewhere between “No” and “I’d rather not say,” then maybe it’s time to ditch the membership in favor of working out at home. Or perhaps you’re a certified gym rat who faithfully wrings every dollar out of your gym membership each month. Then ask yourself if you really need all the bells and whistles that an expensive gym might offer. Elliptical, dumbbells, and machines with clearly printed how-tos? Yes, of course. But a hot tub, sauna, and an out-of-pocket juice bar? Maybe not. If you can get in a solid workout without a few of those pricey extras, your body and your wallet will thank you.

Get started: Instead of a using a treadmill inside the gym, take a walk or jog around your local park each day – it’s free! If you prefer to work out at a gym, look into month-to-month membership options instead of paying a hefty price for a year-long membership up front.

3. Ditch cable and use a video streaming service instead. Cable may give you access to more channels and more shows than ever before, but let’s be honest. Who has time to watch 80 hours of the greatest moments in sports every week? Asking yourself if you could cut the cable and wait a little longer for your favorite shows to become available on a streaming service might not be a bad idea. Plus, who doesn’t love using a 3-day weekend to binge-watch an entire series every now and then? There’s also the bonus of how easy it is to cancel/reactivate a streaming service. With cable, you may be locked into a multi-year contract, installation can be a hassle (and they may add an extra installation fee), and you can forget about knowing when the cable guy is actually going to show up.

Get started: Plenty of streaming services offer free trial periods. Go ahead and give them a try, but be careful: You may have to enter your credit card number to access the free trial. Don’t forget to cancel before your trial is over, or you will be charged.

Taking time to address the luxuries you can live without (or enjoy less often) has the potential to make a huge impact on your journey to financial independence. Cutting back here and investing in yourself there – it all adds up.

In what areas do you think you can start indulging less?

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January 27, 2020

7 Money-Saving Tips for Budgeting Beginners

7 Money-Saving Tips for Budgeting Beginners

Starting a budget from scratch can seem like a huge hassle.

You have to track down all of your expenses, organize them into a list or spreadsheet, figure out how much you want to save, etc., etc.

But budgeting doesn’t have to be difficult or overwhelming. Here are 7 easy and fun tips to help keep your budget in check and jump-start some new financial habits!

Take stock
Laying out all of your expenses at once can be a scary thought for many of us. One key is to keep your budget simple—figure out what expenses you do and don’t really need and see how much you have left over. This method will help you figure out how much spending money you actually have, how much your essential bills are, and where the rest of your money is going.

Start a spending diary
Writing down everything you spend for just a couple of weeks is an easy way of finding out where your spending issues lie. You might be surprised by how quickly those little purchases add up! It will also give you a clue about what you’re actually spending money on and places that you can cut back.

Don’t cut out all your luxuries. Don’t get so carried away with your budgeting that you cut out everything that brings you happiness. Remember, the point of a budget is to make your life less stressful, not miserable! There might be cheap or free alternatives for entertainment in your town, or some great restaurant coupons in those weekly mailers you usually toss out.

That being said, you might decide to eliminate some practices in order to save even more. Things like packing sandwiches for work instead of eating out every day, making coffee at home instead of purchasing it from a coffee shop, and checking out a consignment shop or thrift store for new outfits can really stretch those dollars.

Plan for emergencies
Emergency funds are critical for solid budgeting. It’s always better to get ahead of a car repair or unexpected doctor visit than letting one sneak up on you![i] Anticipating emergencies before they happen and planning accordingly is a budgeting essential that can save you stress (and maybe money) in the long run.

Have a goal in mind
Write down a budgeting goal, like getting debt free by a certain time or saving a specific amount for retirement. This will help you determine how much you want to save each week or month and what to cut. Most importantly, it will give you something concrete to work towards and a sense of accomplishment as you reach milestones. It’s a great way of motivating yourself to start budgeting and pushing through any temptations to stray off the plan!

Stay away from temptation
Unsubscribe from catalogs and sales emails. Unfollow your favorite brands on social media and install an ad blocker. Stop going to stores that tempt you, especially if you’re just “running in for one thing.” Your willpower may not be stronger than the “Christmas in July” mega sales, so just avoid temptation altogether.

Keep yourself inspired and connected
Communities make almost everything easier. Fortunately, there’s a whole virtual world of communities on social media dedicated to budgeting, getting out of debt, saving for early retirement, showing household savings hacks, and anything else you would ever want to know about managing money. They’re great places for picking up ideas and sharing your progress with others.

Budgeting and saving money don’t have to be tedious or hard. The rewards of having a comfortable bank account and being in control of your spending are sweet, so stay engaged in the process and keep learning!

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November 25, 2019

What to Do First If You Receive an Inheritance

What to Do First If You Receive an Inheritance

In many households, nearly every penny is already accounted for even before it’s earned.

The typical household budget that covers the cost of raising a family, making loan payments, and saving for retirement usually doesn’t leave much room for extra spending on daydream items. However, occasionally families may come into an inheritance, you might receive a big bonus at work, or benefit from some other sort of windfall.

If you ever inherit a chunk of money (or large asset) or receive a large payout, it may be tempting to splurge on that red convertible you’ve been drooling over or book that dream trip to Hawaii you’ve always wanted to take. Unfortunately for many, though, newly-found money has the potential to disappear quickly with nothing to show for it, if you don’t have a strategy in place to handle it.

If you do receive some sort of large bonus – congratulations! But take a deep breath and consider these situations first – before you call your travel agent.

Taxes or Other Expenses
If you get a large sum of money unexpectedly, the first thing you might want to do is pull out your bucket list and see what you can check off first. But before you start spending, the reality is you’ll need to put aside some money for taxes. You may want to check with an expert – an accountant or financial advisor may have some ideas on how to reduce your liability as well.

If you suddenly own a new house or car as part of an inheritance, one thing that you may not have considered is how much it will cost to hang on to them. If you want to keep them, you’ll need to cover maintenance, insurance, and you may even need to fulfill loan payments if they aren’t paid off yet.

Pay Down Debt
If you have any debt, you’d have a hard time finding a better place to put your money once you’ve set aside some for taxes or other expenses that might be involved. It may be helpful to target debt in this order:

  1. Credit card debt: These are often the highest interest rate debt and usually don’t have any tax benefit. Pay these off first.
  2. Personal loans: Pay these off next. You and your friend/family member will be glad you knocked these out!
  3. Auto loans: Interest rates on auto loans are lower than credit cards, but cars depreciate rapidly – very rapidly. If you can avoid it, you don’t want to pay interest on a rapidly depreciating asset. Pay off the car as quickly as possible.
  4. College loans: College loans often have tax-deductible interest but there is no physical asset you can convert to cash – there’s just the loan.
  5. Home loans: Most home loans are also tax-deductible. Since your home value is likely appreciating over time, you may be better off putting your money elsewhere rather than paying off the home loan early.

Fund Your Emergency Account
Before you buy that red convertible, put aside some money for a rainy day. This could be liquid funds – like a separate savings account.

Save for Retirement
Once the taxes are covered, you’ve paid down your debt, and funded your emergency account, now is the time to put some money away towards retirement. Work with your financial professional to help create the best strategy for you and your family.

Fund That College Fund
If you have kids and haven’t had a chance to save all you’d like towards their education, setting aside some money for this comes next. Again, your financial professional can recommend the best strategy for this scenario.

Treat Yourself
NOW you’re ready to go bury your toes in the sand and enjoy some new experiences! Maybe you and the family have always wanted to visit a themed resort park or vacation on a tropical island. If you’ve taken care of business responsibly with the items above and still have some cash left over – go ahead! Treat yourself!

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October 28, 2019

3 Simple Benefits of Indexed Universal Life Insurance

3 Simple Benefits of Indexed Universal Life Insurance

If you’re not familiar with indexed universal life insurance, you’ve come to the right place.

What is an IUL?
Indexed universal life insurance (IUL) is a type of permanent life insurance that has an investment element that helps the policy build cash value.

Part of the premium for an IUL is invested in stock options that track an index, like the S&P 500 or NASDAQ 100. This provides a higher growth potential than a whole life policy or a standard universal life policy (both of which provide a conservative fixed return). Gains may be capped in an indexed universal life policy, but the policy provides protections that prevent stock market meltdowns or slow slides from eroding the cash value in your policy.

Here are some of the main benefits of an IUL:
1. It protects your downside. Unlike direct investments, mutual funds, or other types of investments – an indexed universal life policy protects your downside. If the market drops for the index (or indexes) your policy tracks, you keep the gains and are sheltered from the losses. Don’t you wish your 401k or private investments could do that?

2. The cash value in your policy grows tax-deferred. Without the frequent tax liability that often comes with trading in and out of stocks or funds, the cash value can grow unhindered by the ball and chain of capital gains or income taxes.

3. Gains for an indexed universal life policy can be significantly higher than with a whole life policy or a universal life policy. Even with capped gains, which is a tradeoff in exchange for providing a floor to protect your policy from losses, the gains in an indexed universal life policy can outpace the earnings in fixed-rate policies. As with any investment, time tends to be your best friend, smoothing the down years (flat years for an IUL) with strong years to build an upward trend line.

An indexed universal life insurance policy can help supplement your retirement savings strategy and work in parallel with your existing 401k and IRAs – but with access to your cash value before age 59 ½ – or after – and without the dreaded 10 percent penalty for early withdrawal.

Summing It Up
As both a permanent life insurance policy and a tax-deferred investment vehicle that shields you from market losses, an indexed universal life policy can help provide for your family at nearly any point in life and then provide for your beneficiaries when you pass away.

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September 3, 2019

Big Financial Rocks First

Big Financial Rocks First

A teacher walked into her classroom with a clear jar, a bag of rocks, a bucket of sand, and a glass of water. She placed all the large rocks carefully into the jar.

“Who thinks this jar is full?” she asked. Almost half of her students raised their hands. Next, she began to pour sand from the bucket into the jar full of large rocks emptying the entire bucket into the jar.

“Who thinks this jar is full now?” she asked again. Almost all of her students now had their hands up. To her student’s surprise, she emptied the glass of water into the seemingly full jar of rocks and sand.

“What do you think I’m trying to show you?” She inquired.

One eager student answered: “That things may appear full, but there is always room left to put more stuff in.”

The teacher smiled and shook her head.

“Good try, but the point of this illustration is that if I didn’t put in the large rocks first, I would not be able to fit them in afterwards.”

This concept can be applied to the idea of a constant struggle between priorities that are urgent versus those that are important. When you have limited resources, priorities must be in place since there isn’t enough to go around. Take your money, for example. Unless you have an unlimited amount of funds (we’re still trying to find that source), you can’t have an unlimited amount of important financial goals.

Back to the teacher’s illustration. Let’s say the big rocks are your important goals. Things like buying a home, helping your children pay for college, retirement at 60, etc. They’re all important –but not urgent. These things may happen 10, 20, or 30 years from now.

Urgent things are the sand and water. A monthly payment like your mortgage payment or your monthly utility and internet bills. The urgent things must be paid and paid on time. If you don’t pay your mortgage on time… Well, you might end up retiring homeless.

Even though these monthly obligations might be in mind more often than your retirement or your toddler’s freshman year in college, if all you focus on are urgent things, then the important goals fall by the wayside. And in some cases, they stay there long after they can realistically be rescued. Saving up for a down payment for a home, funding a college education, or having enough to retire on is nearly impossible to come up with overnight (still looking for that source of unlimited funds!). In most cases, it takes time and discipline to save up and plan well to achieve these important goals.

What are the big rocks in your life? If you’ve never considered them, spend some time thinking about it. When you have a few in mind, place them in the priority queue of your life. Otherwise, if those important goals are ignored for too long, they might become one of the urgent goals - and perhaps ultimately unrealized if they weren’t put in your plan early on.

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June 19, 2019

Making Money Goals That Get You There

Making Money Goals That Get You There

Setting financial goals is like hanging a map on your wall to inspire and motivate you to accomplish your travel bucket list.

Your map might have your future adventures outlined with tacks and twine. It may be patched with pictures snipped from travel magazines. You would know every twist and turn by heart. But to get where you want to go, you still have to make a few real-life moves toward your destination.

Here are 5 tips for making money goals that may help you get closer to your financial goals:

1. Figure out what’s motivating your financial decisions. Deciding on your “why” is a great way to start moving in the right direction. Goals like saving for an early retirement, paying off your house or car, or even taking a second honeymoon in Hawaii may leap to mind. Take some time to evaluate your priorities and how they relate to each other. This may help you focus on your financial destination.

2. Control Your Money. This doesn’t mean you need to get an MBA in finance. Controlling your money may be as simple as dividing your money into designated accounts, and organizing the documents and details related to your money. Account statements, insurance policies, tax returns, wills – important papers like these need to be as well-managed as your incoming paycheck. A large part of working towards your financial destination is knowing where to find a document when you need it.

3. Track Your Money. After your money comes in, where does it go out? Track your spending habits for a month and the answer may surprise you. There are a plethora of apps to link to your bank account to see where things are actually going. Some questions to ask yourself: Are you a stress buyer, usually good with your money until it’s the only thing within your control? Or do you spend, spend, spend as soon as your paycheck hits, then transform into the most frugal individual on the planet… until the next direct deposit? Monitor your spending for a few weeks, and you may find a pattern that will be good to keep in mind (or avoid) as you trek toward your financial destination.

4. Keep an Eye on Your Credit. Building a strong credit report may assist in reaching some of your future financial goals. You can help build your good credit rating by making loan payments on time and reducing debt. If you neglect either of those, you could be denied for mortgages or loans, endure higher interest rates, and potentially difficulty getting approved for things like cell phone contracts or rental agreements which all hold you back from your financial destination. There are multiple programs that can let you know where you stand and help to keep track of your credit score.

5. Know Your Number. This is the ultimate financial destination – the amount of money you are trying to save. Retiring at age 65 is a great goal. But without an actual number to work towards, you might hit 65 and find you need to stay in the workforce to cover bills, mortgage payments, or provide help supporting your family. Paying off your car or your student loans has to happen, but if you’d like to do it on time – or maybe even pay them off sooner – you need to know a specific amount to set aside each month. And that second honeymoon to Hawaii? Even this one needs a number attached to it!

What plans do you already have for your journey to your financial destination? Do you know how much you can set aside for retirement and still have something left over for that Hawaii trip? And do you have any ideas about how to raise that credit score? Looking at where you are and figuring out what you need to do to get where you want to go can be easier with help. Plus, what’s a road trip without a buddy? Call me anytime!

… All right, all right. You can pick the travel tunes first.

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May 15, 2019

3 Advantages to Being the Early Bird

3 Advantages to Being the Early Bird

Extra-large-blonde-roast-with-a-double-shot-of-espresso, anyone?

As the old saying goes, “The early bird catches the worm.” But not everyone is an early riser, and getting up earlier than usual can throw off a night owl’s whole day.

But there are a couple of things that, if started early in life (and with copious amounts of caffeine, if you’re starting early in the day, too), could benefit you greatly later in life. For example, learning a second language.

The optimal age range for learning a second language is still up for debate among experts, but the consensus seems to be “the younger you start, the better.” It’s a good idea to start early – giving your brain an ample amount of time to develop the many agreed upon benefits of being bilingual that don’t show up until later in life:

  • Postponed onset of dementia and Alzheimer’s (by 4.5 years)
  • Much more efficient brain activity – more like a young adult’s brain
  • Greater cognitive reserve and ability to cope with disease

Imagine combining that increased brain power with a comfortable retirement – an important goal to start working towards early in life!

Here are 3 big advantages to starting your retirement savings early:

1. Less to put away each month.
Let’s say you’re 40 years old with little to no savings for retirement, but you’d like to have $1,000,000 when you retire at age 65. Twenty-five years may seem like plenty of time to achieve this goal, so how much would you need to put away each month to make that happen?

If you were stuffing money into your mattress (i.e., saving with no interest rate or rate of return), you would need to cram at least $3,333.33 in between the layers of memory foam every month. How about if you waited until you were 50 to start? Then you’d need to tuck no less than $5,555.55 around the coils. Every. Single. Month.

A savings plan that aggressive is simply not feasible for a majority of North Americans. Nearly half of Canadians and 78% of American full-time workers are just getting by, living paycheck-to-paycheck. So it makes sense that the earlier you start saving for retirement, the less you’ll need to put away each month. And the less you need to put away each month, the less stress will be put on your monthly budget – and the higher your potential to have a well-funded retirement when the time comes.

But what if you could start saving earlier and apply an interest rate? This is where the second advantage comes in…

2. Power of compounding.
The earlier you start saving for retirement, the longer amount of time your money has to grow and build on itself. A useful shortcut to figuring out how long it would take your money to double is the Rule of 72.

Never heard of it? Here’s how it works: Take the number 72 and divide it by your annual interest rate. The answer is approximately how many years it will take for money in an account to double.

For example, applying the Rule of 72 to $10,000 in an account at a 4% interest rate would look like this:

72 ÷ 4 = 18

That means it would take approximately 18 years for $10,000 to grow to $20,000 ($20,258 to be exact).

Using this formula reveals that the higher the interest rate, the less time it’s going to take your money to double, so be on the lookout for the highest interest rate you can find!

Getting a higher interest rate and combining it with the third advantage below? You’d be on a roll…

3. Lower life insurance premiums.
A well-tailored life insurance policy may help protect retirement savings. This is particularly important if you’re outlived by your spouse as he or she approaches their retirement years.

End-of-life costs can deal a serious blow to retirement savings. If you don’t have a strategy in place to help cover funeral expenses and the loss of income, the money your spouse might need may have to come out of your retirement savings.

One reason many people don’t consider life insurance as a method of protecting their retirement is that they think a policy would cost too much.

How much do you think a $250,000 term life insurance policy would cost for a healthy 30-year-old?

Less than $14 per month. That’s a cost that would easily fit into most budgets!

You may still need a little caffeine for the extra kick to get an early start on powering up your brain (or your retirement savings), but sacrificing a few brand-name cups of coffee per month could finance a well-tailored life insurance policy that has the potential to protect your retirement savings.

Contact me today, and together we can work on your financial strategy for retirement, including what kind of life insurance policy would best fit you and your needs. As for your journey to the brain-boosting benefits of being bilingual – just like with retirement, it’s never too late to start. And I’ll be here to cheer you on every step of the way!

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May 8, 2019

What is your #1 financial asset?

What is your #1 financial asset?

What is your #1 financial asset? It’s not your house, your retirement fund, or your rare baseball card collection gathering dust.

Your most valuable financial asset is YOU!
Today – Labor Day, the unofficial last day of summer – let’s look at ways you can develop your skills and outlook in the workforce as we move from summertime vacation mode into finishing 2018 strong.

You might be savvy at home improvement, you might be a whiz with your finances, or you might have the eye to spot a hidden treasure at a yard sale, but how do you increase your value as a laborer in the workforce? One of the top traits of successful people is that they come up with a plan and they execute. Waiting for things to happen or taking the crumbs life tosses their way isn’t on their to-do list. Whether you’re dreaming of a secure future for yourself and your family, or if you want to build a career that enables you to help others down the road (or both!), the path to your goal and how fast you get there is up to you.

Increase your value as an employee
Working for someone else doesn’t have to feel like a prison sentence. In a recent study, nearly 60% of entrepreneurs worked full time as an employee for someone else while planning and building their own business on the side. Being employed is a chance to learn alongside experienced mentors, and prime time to experiment with how you can best add value. In many cases, successful entrepreneurs spent their time in the workforce amassing a wealth of information on how businesses are run, making mental notes on what doesn’t work, and practicing what can be done better.

View your time as an employee as an opportunity to hone your problem solving skills. It’s a mindset – one that can make you a more valuable employee and prepare you for great things later. Being seen as a problem solver can grant you more opportunity for promotions, pay increases, greater responsibility, and perhaps most importantly, open up more chances for life-enriching experiences.

Build your financial strategy
While you’re working to increase your value as a laborer, you’ll benefit from steady footing before taking your next big step. This is where building a solid financial strategy comes into play. Nearly everyone has the potential to be financially secure. Where most find trouble is often due to not having a plan or not sticking to the plan. A few simple principles can guide your finances, setting you up for a future where you have freedom to choose the life you envision.

  • Pay yourself first. Starting early and continuing as your earnings grow, begin the habit of paying yourself first. Simply, this means putting away some money every month or every paycheck that can help you reach your financial goals over time. Ideally, this money will be invested where it can grow. The goal is to get the money out of harm’s way, where you would have to think twice before dipping into your savings before you spend.
  • Develop a budget and consider expenses carefully. Think about expenditures before opening your wallet and swiping that credit card. Avoid debt wherever possible. Most people are able to have more money left over at the end of the month than they might realize. Don’t be afraid to tell yourself “no” so you can reach a bigger goal.
  • Plan for loved ones with life insurance. Here is where the value you provide your family through your hard work comes into sharp focus. Life insurance is essentially income replacement, should the worst happen. Meet with your financial professional and put a tailored-to-you life insurance policy in place that assures your family or dependents are taken care of.

Put your skills to work as a leader
Once you’ve established a level of financial security, now is the time to think about giving back by providing opportunities and helping others to realize their goals. There’s an old saying: “You’ll never get rich working for someone else.” While that’s not always true, trying to realize your long-term financial goals in an entry-level position might be an uphill climb. Moving up into a leadership position can teach you new skills and can increase your earning power. The average salary for managers approaches six figures!

You might even be ready to branch out on your own, investing the knowledge and leadership skills you’ve gained over the years in your own venture. Consider becoming an entrepreneur with your own financial services business – this can allow you to help others while building on your continuing success as a financial professional.

Whether you choose to strike out on your own, start a new part-time business, or grow within the organization or industry you’re in now, there are key traits that will help you succeed. Having a future-driven, forward-thinking mindset will guide your decisions. Your sense of commitment and the leadership skills you’ve honed on your journey will define your career – and perhaps even your legacy – as others learn from your example and use the same principles to guide their own success.

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October 15, 2018

Budget Like a Rock Star with Your First Job

Budget Like a Rock Star with Your First Job

Congratulations! Landing your first full-time job is exciting, especially if you’ve been dreaming of that moment throughout college.

Now you can loosen your belt a little and not spend so much brain power on creative ways to make ramen noodles. But before you go and start spending on the things you’ve had to skimp on in school, it’ll be worth it to take a breath, do some self-examination, and create a budget first.

This is probably the absolute best time in your life to start a habit of budgeting that will last you a lifetime – before life gets more complicated with a family, mortgage, etc. If you become a whiz at your personal financial strategy, tackling all the things that life will bring your way may (hopefully) go a lot smoother.

So here are a few tips on setting up your budget with your first job:

1. Think about why you want a budget
It may sound silly, but knowing why you’re putting yourself on a budget will help you stick to it when temptations to overspend flare up. Beginning a budget early in life when you start your first job will help lay the foundation for responsible financial management.

Think about your goals here. Having a budget will help you (when the time is right) to acquire things like a home, new car, or a family vacation to the islands. Budgeting can also help you enjoy more immediate wants, like a designer handbag or new flat screen TV.

2. Get familiar with your spending
You can’t create a budget without knowing your expenses. Take a good, hard look at not just your income but also your “outgo”. Include all your major expenses of course – rent, insurance, retirement savings, emergency funds. But don’t forget about miscellaneous expenses – even the small ones. That coffee on the way to work – it counts. So does the $3.99 booster pack in your favorite phone game.

Track your expenses over the course of a couple of weeks to a month. This will give you insight into your spending, so your budget is accurate.

3. Count your riches
Now that you have your first job, add up your income. This means the money you take home in your paycheck – not your salary before taxes. Income can also include earnings from side jobs, regular bonuses, or income investment. Whatever money you have coming in counts as income.

4. Set your budget goals
Give yourself permission to dream big here and own it! Set some financial goals for yourself – and make them specific and personal. For example, don’t make “save up for a house” your goal because it’s not specific or personal. Think about the details. What type of house do you want, and where? When do you see yourself purchasing it?

For example, your budget goal may look something like this: “Save $20,000 by the time I’m 27 for a down payment on an industrial loft downtown.“ A good budget goal includes an amount, a deadline, and a specific and detailed outcome.

5. Use a tracker
A budget tracker is simply a tool to create your budget and help you maintain it. It can be as simple as a pen and paper. A budget tracker can also be an elaborate spreadsheet, or you can use an online tool or application.

The best budget tracker is the one you’ll stick to, so don’t be afraid to try a few different methods. It may take some trial and error to find the one that’s right for you.

6. Put it to the test
Test your budget and tracking system to see if it’s working for you. Try to recognize where your pitfalls are and adjust to overcome them, but don’t give up! It’s something your future self will thank you for.

7. Stick to it
Creating a budget that works is a process. Take your time and think it through. You’re probably going to need to tweak it along the way. It’s ok!

The best way to think about a budget is as an ongoing part of your life. Make it your own so that it works for your needs. And as you change – like when you get that promotion – your budget can change with you.

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