A lack of money management skills can be likened to a home infested with formosan termites. With formosan termites there is no immediate indication that a problem exist but activity is going on behind the scenes that will soon reveal its existence. It’s the same with a lack of money management skills or financial planning. Initially everything may appear to be fine, but before long things will begin to spiral out of control producing a tragic ending.
I remember as a kid coming home to an incident that was one of many that spring. This incident was our introduction to the termite infestation in our home. I entered our home and noticed bugs flying around the french doors leading to the backyard. Of course I immediately began to sweep them outside, but the more I did the more they surfaced. Many consumers do the same thing. They attempt to sweep their problems of financial mismanagement out the back door before ever seeking professional help from a wealth management advisor. My parents came home that evening and arranged an appointment with a termite company. The gentleman came out and showed my parents the damage the termites had done and had been doing for months. Of course the bill was astronomical and appeared out of reach. They attempted to hold off on having the much needed work done. After a few more weeks of swarming termites my parents buckled down and began the process of treatments. Costly, but needful, the treatments began and so did the restoration of our home. Just like our devastating discovery at our home needed treatment, consumers swarming in debt and financial upheaval is a problem that can’t be solved without a registered financial advisor.
If you don’t have a monthly budget, formulate one immediately. Knowing the amount of outgo and income is paramount. This budget should contain all of your monthly expenditures. Orchestrate a simple plan to begin to pay off debt. Tackle one bill. Once you’ve paid one off transfer that amount of money towards paying off another one. Debt and lack of money management are your formosan termites – wealth management and financial planning are your keys toward restoration. Another key is to establish a retirement plan. You must plan for the future, if you don’t, it won’t make plans for you either. Creating a savings is another valuable tool. My grandmother always said to plan for a rainy day. Over the past year and a half our country has seen many of those. And yes despite the ups and downs of the market, invest! A good investment advisor will school you on what is safe and not safe. Lastly, take advantage of your company’s 401k options. This is in addition to your regular retirement plan.