Note: We are doing a short series on what it takes to win with money. We are applying the concept of “playing above the line” in three areas: Taking Ownership, Planning for the Future, and Loving Your Family Well.
In part one of this series, we looked at the concept of taking ownership of your money. When you get control over your money it can start working for you. Let’s look at the second area of playing above the line with your money, planning for the future:
II. Planning for the Future
- Save for emergencies. At a minimum you need $1,000 in your beginner’s emergency fund. Later, you should build that up to 6 months of expenses.
- Eliminate all of your consumer debt. You won’t be able to make much progress if all your money is going to pay everyone else but you!
- Start saving for retirement (after you get out of consumer debt). You need to build up to put away 15% of your gross income every year.
- Start saving for college (after you get out of consumer debt). If you have kids, you can pass on to them the great gift of going through college without student loans. It is possible!!!
- Pay off the mortgage. After you have retirement and college savings under control, you can start working on eliminating the debt on your primary residence. You don’t need a mortgage just because you want to keep a tax deduction. You can achieve the same deduction by increasing your charitable giving. Get complete peace of mind knowing that your home is completely yours.
So what will you choose? Will you choose to take ownership of your finances or let everyone else set the standard for you? Will you choose to stay below the line or will you choose to live beyond mediocrity? Average won’t cut it. Normal won’t cut it. You can’t win if you don’t do your best.
“Always bear in mind that your own resolution to succeed is more important than any one thing.”
You can now read part 1 and part 3 at the links below: