1. List your five most important core values.  Some examples of core values are: family, faith, meaningful work, philanthropy, ethics, etc.  These values are the foundation upon which we build our lives.  The more deeply you understand your core values, the better you will be able to determine the goals and actions of your life.
  2. Set goals based upon the core values you identified.  If family or education are your core values, then establishing and funding a college savings account would be a goal aligned with that value.  If independence is a core value, then having a goal to accumulate 3 to 6 months of living expenses will help achieve that.
  3. Know what you have. Many people do not have a clear picture of their current financial position. The financial world calls this inventory a “balance sheet.”  You start by writing down what you have. Some examples are a home, car, checking or savings account, retirement account, coin or baseball card collection, artwork, or business ownership. A balance sheet also lists your outstanding debt.  Mortgages, car or student loans, home equity lines of credit, and unpaid balances on a credit card are examples of debt.  The difference between these two categories (what you have minus what you owe) is called your financial net worth.  It helps you to know where you stand.
  4. Know what you need.  The operative word is need!  As the father of two sons in their early twenties, I continually try to teach the difference between a “need” and a “want.”  Reviewing your core values will help you discern between the two.  Focus on meeting the needs, and you will reduce spending time and money on wants that can lead to regret longer-term.
  5. Save for what you want.  Once you save what you need and pay for those needs, I believe you should have some fun and spend the rest as you see fit. This is like when you eat well and exercise, then you can have that dessert you want.
  6. Be flexible and patient.  In full disclosure, I struggle with this daily!  But ask yourself this vital question, “Am I a teachable person?”  The follow-up question is, “Do I practice delayed gratification?”  Being flexible and patient are traits of wisdom.  These traits can accumulate over a lifetime.
  7. Seek sound advice from professionals with integrity.  A fiduciary is someone who acts in your best interest, without regard to their own interests.  If you are seeking guidance for financial, medical, legal, or even occupational matters, look for someone who is focused on what’s best for you.  This is one of Shadowridge’s core values.