You have a tax refund. What's next? In this blog, we discuss creative and simple ideas on what to do next with your money.
A recent study produced by Wallet Hub, listed New Mexico as the 49th least financially literate state out of the 50 states plus Washington DC. The two states worse than NM were Arkansas and Missouri. According to their research, the top financially literate states were Minnesota, New Hampshire and North Dakota.
As a native New Mexican, this study does not come as a complete surprise. In fact, I have come to expect seeing New Mexico land on the low end of these studies. Maybe I am wrong in my expectations but year after year of these studies listing NM so low, this has become expected. One of my former bosses used to quote, "A point doesn't make a trend but a trend makes a point". I think that we have seen enough of these points that we see a bad trend for NM to be in.
So do we just sit around and accept the norm?
Onward Financial was created to bring financial planning coupled with financial education. Financial education is not very common and when there are available resources, most people tend to charge.
So how do we change the trend?
Here are a few thoughts on how you can become more financially literate with your every day money.
1. Where is your money being spent?
Many people cringe at the use of the word budget, so I am not going to use it. But do you know where your money is being spent? Here is a simple exercise that will take 10 minutes to complete.
- Write down how much you think you spend each month in these two categories: Eating Out (this includes Starbucks) and Groceries.
- Pull up last month's bank statement. (Most banks offer this view through their mobile app)
- Use a calculator and begin first with Restaurants. Be honest as you punch in the numbers in your calculator.
- What # did you get?
- Next, do the same thing with groceries.
- What # did you get?
- Were you higher or lower than your original guess?
- Was there any trends that was revealing in your spending habits last month?
Almost every time when I do this exercise with my clients, they always guess way under than what they actually spent. This is often due to the fact that we mentally disregard any purchases under $5. For some reason, those "little" purchases don't seem that big of a deal but when you add them up at the end of the month, they can quickly add up as a big expense.
2. What are your financial goals?
"Goals" are another one of those taboo words that we don't like to use but need to have in our financial arsenal.
"People Don't Plan To Fail, They Fail To Plan"
Goals should be simple, tangible and attainable. They don't need to be complicated or complex. An engineering degree shouldn't be necessary.
Where to Start?
- Write everything down.
- What things did you want to do or have this past year but couldn't because of no money?
- Is it something you still want? If so, what will it take for you to save and get it?
- Put a deadline on meeting those goals.
- Celebrate when you complete a goal.
- Finally, be accountable to someone with your goals.
- Whether you are single or married, share with someone what your goals are going to be and how you are going to accomplish them.
Not sure how many advisors would tell you this but make time to reward and celebrate your success. If we worked hard to set our goals and worked even harder to achieving those goals, then we should celebrate the victories of meeting our goals. This not an excuse to go buy that new Tesla (unless you saved for it) but rather this is a way where we can reward ourselves for completing something. Often times, this celebration for me usually looks like a nice night out with my wife or an inexpensive weekend getaway or even as simple as grilling up that T-Bone steak. Simple little rewards continue to re-enforce the positive behavior of completing your goals
4. Keep learning
Don't stop here! I repeat "DON'T STOP HERE"! Continue to fuel the desire for financial literacy. There a bunch of resources available from many different authors who come from different experiences and perspectives on money. You may have heard me say it before but there is not one way to manage your money. There is not one magic product that you can put your money in. There is not one person that is the end-all-be-all for financial education. Surround yourself with a team of professionals who specialize in different areas in the financial industry. This can only help you in your gain of knowledge for more financial literacy.
Here are some resources that I frequently use in my daily reading and education for finances:
- Onward Financial Blog (shameless plug)
- Listen Money Matters
- They have a weekly podcast that they put out and a bunch of amazing resources for you to take your financial knowledge to the next step
- Mint Budgeting App
- Credit Karma
If you have any other resources, tools or books that you have found helpful in your financial journey, please comment below and share. Helping each other grow in our financial knowledge will be the only way we can change the "norm" of New Mexico's financial literacy deficit.
Have you ever heard of Annuities and wondered what they are? Has a financial planner talked to you about them? Do you have no idea on what I am talking about and would like to learn more?
Educate yourself by reading my latest blog to find out to find out more about this retirement tool that you may be missing out on.
Another year has come and gone. I pray that 2015 was filled with great memories spent with loved ones and the people that matter most. This past year was a special year for me and I thought I would take a minute of your time to share it with you and help me celebrate.
As many of you know, on December 13th, 2014, I finished my Finance degree from Anderson School of Management at UNM. This day is a milestone in my life that I will always remember, not just because I finished my degree, but because I was surrounded by so many family and friends who supported me through those two years of school.
On January 19th, 2015, I stepped out on another adventure to fulfill another dream. This dream was simple, help people. So I decided to take my two passions, helping people and finances and start my own financial planning company called Onward Financial. The vision is simple, create a company that focuses on providing independent, unbiased, educational financial help that is customized for you.
I came into this industry wanting to change the perception that currently exists among many financial advisors and insurance salesmen today. Unlike many people in my industry who primarily focuses on selling you a product or creating accounts to impress their bosses, I am here for my clients. I believe that creating a customized independent financial strategy is the best way to reach your financial goals.
Making the decision to start my own company and rejecting four job offers from other finance firms was a huge risk for my family but one I was willing to take… Did I mention that this was a HUGE risk? Working for a big company offers certain benefits but taking a step back and evaluating the type of services that I wanted to provide for my clients it would not have been possible through these companies.
Looking back one year later, I couldn’t be more satisfied about the decision I made to step out on my own. Independence has allowed me to walk my clients through a more comprehensive financial plan and help educate them along the way. My clients value this process to their plan.
The other benefit of being independent has been the freedom and control of my time, facilitating more time spent with my family. This past year I was blessed to help coach two seasons of Beckett’s baseball teams, as well as offering availability to my wife and my kids to participate with the homeschooling that my wife and I have always wanted to do. Don’t get me wrong, I am working more than I ever have, but the hours don’t seem quite as long as they did before.
As I go into my second, what I ask of you is this… I have chosen to build my practice purely on referrals and not spend money and time towards marketing. You can be my greatest marketing team and if you’ll partner with me, I know that we can make this next year even better.
As I look forward to what is in store for my family and myself, I must stop and say thank you. Thank you for supporting my family and me as I continue to pursue my dreams. There is so much to be thankful for, and your support has kept me going.
Onward Financial, LLC
C: (505) 238-6381
Without a plan, time works against you. With a plan, time works for you.