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Steps to Financial Wellness

 1.   Identify and become responsible for your short through
long-term need of financial wellness.

          Consciously, with your spouse if married, consider your daily expenses. Prioritize your financial needs as a family.  Consider what and where your donations will go.  Analyze your investments and long time goals.  Recognize the need for both insurance and cash savings.

 2.   Establish an emergency fund.

          Many unexpected items arise during your life, be ready for them.  First  establish at least 1 month security for everyday living expenses.  Then work up to 6 months to 1 year of cushion.  If you or a family member is injured, loses a job or becomes ill 6 months to 1 year of income is usually a comfortable protection for expenses.  At least 3-6 months of expenses for a household with two incomes.

 3.   Create a budget that is aligned with your life guiding principles.

                       a.     Giving 10%-obligation to God, Family, Community

                       b.    Taxes 25%

                       c.     Long-term Financial Security 15%

                                     i.   Cash Reserve

                                     ii.   Retirement Assets

                                     iii.   Income Producing Assets

                                     iv.    Life and disability insurance

                        d.    Essential Savings 10%

                                      i.     Health Savings Account

                                      ii.    Cars

                                      iii.   Necessities (replace & maintain)

                                      iv.    Vacations

                                      v.     Education

                          e.     Monthly Spending  40%

 4.   Eliminate Debt.

          To be in debt means to be a slave to your creditor.  You will want financial freedom therefore you will want to be in debt to no one.  Eliminate credit card debt, student loans, business debts, and automobile payments.  Mortgages would be the last to pay down since homes   generally maintain or increase in value.

 5.   Develop knowledge of income strategies.

          Explore methods of creating both active and passive income.  Examining both methods will generate growth as time goes on.  Borrowing money with the intention of paying the debt off and most importantly having the investment generate a positive cash flow is proper financial planning.  To be financially secure you will want to be diversified, with three sources of  income.   Your present lifestyle would not be financially affected even if 2 sources were to decrease or disappear.

 6.   Teach your children about money.

          The knowledge you learn, both positive and negative, will guide your child(ren) to a financial situation in which they will be proud to achieve.  The understanding of incoming and outgoing income is essential to a healthy financially fit life for generations to pass down.

 7.   Find a trusted resource to help you avoid costly mistakes.

          Have a consultant (true financial planner – Life’s 5) to make a plan that will   accommodate your lifestyle and income in a comfortable and manageable way.