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Planning and practicing your financial priorities


In order for priorities to be profitable, they must first be planned and then be practiced.

John Maxwell writes, “There are two things that are most difficult to get people to do: to think and to do things in order of importance.” Maxwell says this is the difference between a pro and an amateur.

So, step one is the thinking part – you’ve got to put together an actionable plan that gets you where you want to go as efficiently as possible. Here are the priority areas (as I see them) for any well-rounded financial plan.

Protection. A catastrophe can eliminate all the forward progress you’ve made overnight. Protection is the most ignored area of personal finance I see, but it may be the most important. It is equivalent to the defense on a football team. How well does any team do that has a poor defense?

Savings. Do this first, then spend what’s left over. I recommend 15% as a starting point for your thinking. More is fine.

Spending. The bottom line on any spending plan is that it must: save money, stay out of debt and leave enough to live on. If you can do those three things, as far as I’m concerned, you can write your budget plan on the back of a napkin.

Debt. The reason most folks have consumer debt is they didn’t have any savings when they needed (or wanted) to buy something. Generally, buying stuff you consume with consumer debt is a bad idea.

Investing. If you want to get ahead in our capitalistic system, you’ll probably have to invest (at least to some degree). If not, you’ll have to save voluminous amounts of money. Yes, this means taking some risk with your money, so work with a pro that can put an understandable plan together for you.

Development. Here’s one the almost never gets enough attention. The most valuable asset on your balance sheet is probably you. What are you doing this year to increase your value to the marketplace?

So, that will get your thinking started about planning. Now, what do I mean by practice?

I can’t count how many good intentions have walked through my office. Almost everybody “intends” to go see a lawyer about wills, review their insurance, save more money, pay down debt and invest more money. But somehow…those good intentions don’t ever materialize into real life actions.

Why? No accountability.

I go to an exercise class three weekday mornings at 6am. It’s a pain getting up early and getting there by 6am. I could use the extra sleep. They charge me money just to come. And if I’m late, they won’t wait for me!

So why do I go? Because all I have to do is show up. They do the rest (or…get me to do the rest).

Most of us need that kind of an accountable relationship in our lives to do hard things…things we want to do…but that our own self-motivation is often inadequate to get us to do…on our own.

Priorities are rarely set without a plan. And they are rarely practiced without a person.

So…who’s helping you do what you want to do, but don’t always feel like doing?

My guess is that will be the key to you practicing (rather than just planning) your priorities.

Offering you Wisdom on Wealth, I’m Byron Moore.

Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
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