By Steve Kautz, former Maine mathematics teacher and personal finance expert.
Mastering the Steps to Success with those Finances
Last week while rereading my posts, I realized that I often say things like “start your emergency fund,” or “contribute to a retirement plan.” I also realized you might be wondering which of these would come first, or where these things fit into a more comprehensive fmancial plan. So I thought I’d back the camera out a little bit and look at a general list of steps that should be a part of everyone’s financial life. I started writing and before I knew it I had a list of five or six items, and it looked like I was headed for ten. Then I decided to stop and do a little research to see if I was missing anything.
A Googling I Went…
How boring was I about to be with my “Ten pieces of your financial puzzle”! Within seconds I saw a top 3 list, a top 4 list, a top 5 list, a top 6, and someone else’s top 10 list. Out of curiosity I looked and, you guessed it, I found top 7, top 8, and top 9 lists all centered on personal financial success.
A Top 3.14 List?
I tried to determine how I could differentiate my list. I am a math teacher, so why not my top 3.14 list? I decided that the lists out there were pretty comprehensive, that I wasn’t going to really add anything, and that the best thing to do would be to provide a Reader’s Digest version of some of those lists. Click on the links to go to the websites and see complete versions of the lists. There is some overlap, but these lists are designed for different audiences, and I hope you’ll find something that resonates with you.
In No Particular Order…
Dave Ramsey’s 7 Baby Steps (especially great if you are trying to get out of debt)
- Save $1000 to start an emergency fund
- Pay off debts starting with the smallest
- Save 3 to 6 months of expenses for emergencies
- Invest 15% of income into retirement funds
- Start saving for your children’s education
- Pay off your home early
- Build wealth and give back
Forbes’ Top Personal Finance Tips (to consider on your upcoming work anniversary)
- Review your 401(K)
- Save at least 50% of your salary increase
- Live by the rule of thirds (30% for taxes, 30% for saving, and 30% for living)
- Review your stock holdings
- Negotiate a raise
Quicken’s 3 Steps to Financial Security (short and sweet)
- Save for a rainy day
- Be prepared for an emergency
- Invest for retirement
Good Stuff, For Sure
It’s good practice to read many of these lists. Even if you only get one applicable idea here and there, that one idea will be worth it. What about my list? Well, I’ve been inspired to cut it down to the basics. So, without any more delay… I can do this.
Steve Kautz’s Top 1.5 Steps to Financial… to Your Financial… to Finding Financial…
Aw shucks, I’ve got the steps down but I can’t think of a title. I’m trying to avoid all of the typical catch-words like success, freedom, security, peace, prosperity, etc. I’ll make a deal with you. I’ll release the 1.5 steps now, and I’ll come up with a title for next week.
Step 1: Spend less than you make & put the money you don’t spend to work for you
Step .5: Read/listen/watch/learn everything you can about financial literacy
Now I’m tired from all those steps…
The views, information, or opinions expressed in this blog are solely those of the author and do not necessarily represent or reflect those of the Maine Jumpstart Coalition for Personal Financial Literacy.