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While thinking about what financial rules, things, ideas, or habits are appropriate during a pandemic, it turns out they are the same ones that always make sense.
- Budgeting – I hate this word
- Don’t rely on Social Security
- Start NOW
- Create reserves
BUDGETING: Like a said – I hate this word. I use the term Spending Plan, and even created a register to track my spending goals. ( If you would like a sample of my spending register, you can request it by sending an email to me.)
The word budget brings up the feelings of lack, restriction, sacrifice, none of which are pleasant. It’s like the word diet: What are the first three letters? Not very enrolling, right? With a spending plan you choose how much money you want to spend in any category to want to track; meals out, transportation, entertainment, etc. Then you spend money, not budget, to be in alignment with your goals. Like I said at the beginning of this email/blog, this is always good, not just during a pandemic.
SOCIAL SECURITY: This program was never designed to take care of your retirement. It was always designed to be a supplement to what you did on your own. Without some additional savings or investments that create a passive income, you would have a sad life if all you had was social security when you stopped working.
And unless you are in a job that demands you stop working at a certain age, there is nothing that says you have to stop being a contributing member of society. Even a greeter at Walmart makes shoppers feel good, and every greeter I’ve met also seems happy.
START NOW: The sooner you begin to invest for your future, what I call Complete Financial Choice™, the easier it is to have compound earnings work in your favor. As an example, if your goal is to have $100,000 at age 65, you can invest $545 per month at 8% for 10 years. If you have 25 years then you only need to invest $104 per month. Waiting 15 years requires 500% more money to be invested each month.
RESERVES: The importance of this became very apparent to me during the pandemic. My wife and I had about a year’s worth of cash in our various checking and savings accounts. This was the ready access money without having to use credit cards or go to our investment or retirement accounts. If all our tenants stopped paying rent, if my wife earned no commissions, and if I had no book sales, coaching clients or enrollments in my programs, we would still be okay for a full year.
Life provides unexpected events; the car does not break down at the right time, the water heater stops working at the worst time, and only 10 people in the world expected a pandemic. Having reserves, an emergency account, whatever you want to call it, allows you to relax when life gives you the unexpected.
And the only way to create your reserves is to pay yourself first like you deserve to own some of the money you earn. It has worked for 5000 years, and it will work when you and I are no longer on this planet.
To Your Prosperity,