Meet Joe. Joe has worked all his life at one company. He has worked hard and is now nearing retirement. Joe had a financial goal ever since he was young; work hard and make as much money as he could. But did Joe do all that he could to set himself up for success?
Nearing retirement, Joe and his wife had lived in their house for 20 years. While being financially secure, they had not paid off their house yet. If Joe had had the financial goal of paying off his house early, Joe would have had more money in his pocket for retirement. When it comes to money, it helps to seek out wise counsel early on in life. It pains me to think of those people nearing retirement who hardly have 3 years of living expenses saved up. Sadly, don’t quit your day job.
While many people worry about their financial future, there are people out there whose main purpose is to help people with their money. One such person is Emily Stroud with her book, Faithful Finance.
Emily lists eight ways a financial counselor may help individuals make goals with their finances:
- Budgeting-By controlling monthly spending and keeping smaller purchases in control, it is easier to save money and plan for the future. Make budgeting a goal.
- Cash Reserves-Have three to six months of living expenses saved in case an unexpected emergency occurs.
- Tithing/Giving-Because all of our resources belong to God, it is important that we give back to Him as a form of worship and gratitude.
- Personal Savings Goals-Goals provide direction. Without goals, we tend to stray off what would be best for our future. Make specific goals for savings. Seek out help if you don’t know what to save for.
- Purchasing a Home-Buying a house is probably the largest investment that a family will purchase. Buying an affordable house is always cheaper than renting with the potential bonus of a return on your investment.
- Investments-Other wise counselors such as Dave Ramsey in his book, Total Money Makeover, has said that after you have an emergency fund and all debt (except mortgage) eliminated, start investing 15% of your income into retirement. Making it a goal to start early will pay dividends in the future.
- Saving for College-If saving for college is a goal, start early!
- Estate Planing-Estate planning consists in medical directives, wills, trusts, and the organization of financial affairs. As Emily rightly notes, one of the best gifts parents can give their family is having their finances in order. Don’t wait until its too late.
By making goals, we have direction. As the Bible states, “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty” Proverbs 21:5. Joe could have more of a cushion in retirement if he sought out counsel earlier and planned ahead. Have direction. Make goals.