Editor’s Note – this article is part of our series “Best financial advice I’ve ever received.” People frequently ask bankers the best piece of advice they have ever gotten. So for this series, we’re asking MidWestOne employees to share the best money management tips they’ve ever gotten.
There are three big pieces of financial advice I’ve learned and followed throughout my life that have really helped shape how I handle my finances. They are:
Have a specific financial plan.
Whether it’s saving for a down payment on your first home, planning to save for your children’s college education, or something that can be as overwhelming as trying to plan for retirement, having a specific number is really important. A good analogy is running a race. It’s a lot easier to run a race and pace yourself if you know where the finish line is. It’s the same principle with your financial life. If you can target a specific number, it makes it that much easier to decide how much you need to save, or what type of investments you should choose.
Be a participant in your financial life.
Learn as much as you possibly can, but don’t be afraid to seek out experts. Very few people have expertise in insurance, banking and investments so ask for help if you need it. At the same time, it’s important that you be an active participant in the process. Ask questions and make sure you’re comfortable with what your financial plan is and what you’re receiving.
Find a middle ground to saving.
I have the tendency to try to live my life in the middle. To me, that means I don’t save every dollar at the expense of enjoyment today, nor do I live today at the expense of tomorrow. I try to find that middle ground. For some people it might mean they buy a two-year-old car rather than a new car. Or perhaps they take a vacation every other year rather than every year.
I’m a big believer in the middle because if you’re saving every dollar you have for something you may not even be able to see at this point in your life, it’s pretty hard to do and not much fun. If you have balance in your life, it makes it so much easier to stick with the planning and live for today but also be excited for the future.
Having a budget is really helpful for most people. And again, it’s living in the middle. If you like that nice restaurant down the street, visit it once a month rather than every weekend.
Living in the middle is a philosophy that filters down to your kids. Kids are so much more appreciative of what they have if they’ve had to be a part of the process of saving or working for it.
What I learned from working with people of all ages is when it comes easy, there’s generally not an appreciation for it. But when you have to work for it, it’s usually genuinely appreciated and enjoyed more. So, my advice is to build a plan, get actively engaged in your own financial life, and enjoy the fruits of your labor by living in the middle.