When it comes to money and finance, everyone seems to be an expert or have that one piece of advice that they think is the secret sauce. Don’t get me wrong, there will always be things that are priceless and timeless when it comes to advice being passed from generations. Good manners and respect are examples of just a few. But when it comes to understanding and managing your money in 2020, not all advice is good advice. So here is some adviced that we should be sharing in 2020.
#1 Financial literacy is always a good investment - especially when it comes to money and finances. But as we have recently seen, cash is no longer king even know it should be! But let’s be honest, paper money is pretty icky if you really think about it. When it comes to how we earn, handle and move money things have really changed over the years. The old school piggy bank is now a debit card and allowance is now e-transferred right to your phone. Even the strategies on how we save, invest and purchase real estate have drastically changed, or at least they need to. As an example in 1980, the average household income in Alberta was about $55,000 a year. The average home price was about $80,000. In 2018, the average household income had only risen to $72,000 but house prices had risen to $372,000. What’s the point? Well, that old story that you should rent and save until you can pay cash or put 50% down on a house might be like the old school piggy bank. Between, the change in housing markets, interest rates, investment options, technology, taxes and longer life expectancy, financial literacy, coaching and professional advice is no longer a luxury, but probably the best investment in your future and life you can make or give to someone.
#2 Find your passion - your career passion. As I mentioned, education is important, but things have changed and there are many ways to get an education now that can create wealth which don’t always include going to university for 4 years, just to come out with a general degree, student loans and a job you hate. With remote work, the internet, technology, online classes and a new value for actual working skills and creativity like never before, the sky is endless for anyone wanting to hustle. But probably the most notable point here is that people are living healthy active lives much longer than in previous generations. And with the advancement in technology and healthcare, this will probably be a trend that continues. Getting a job, slugging away for 35 years to retire with a pension at 55-60 is no longer a reality or even a goal for most people. Pensions are going by the wayside and so is doing a job you hate just because it pays well or is stable. Work-life balance, doing what you love and working long into the typical retirement years is something that appeals to a lot of people - including me. The rush to stop working and pressure to give up living today to have a huge nest egg that you may not ever enjoy, comes at a cost that a lot of people realize, may not be worth it. Even just working part-time in retirement gives people so many more opportunities and options for their financial plan today and in the future. When you do what you love, it no longer feels so much like work and allows people to find their passion and grow their wealth at the same time.
#3 Invest in your strengths - not your weaknesses. When you focus on your strengths, you are much happier and productive, which in turn can result in higher income. This is also true when it comes to money and finance. If you are trying to save money investing in the stock market and you don’t have a solid growth plan, its costing you. If you struggle to balance your budget and are paying late fees, it’s costing you. If you are paying credit card interest and don’t have a financial strategy in place, it’s costing you. Most people don’t know their strengths and weaknesses and just keep doing the same thing over and over hoping for a different result. Yep - the definition of insanity. Figure out what you know, admit what you don’t and get help when you need it.
Oh, and remember, contrary to what social media says - everyone does not have it all together, they are not all living the dream, and there is no secret sauce!
Cheap Jo -living my passion, working my strengths and still searching for a secret sauce!
Jodie Stauffer, CFP is a wife, mother and Certified Financial Planner. "Being CHEAP has always been in my DNA. But let me tell you, juggling my business, household finances, financial goals with the needs or more accurately WANTS of my daughters, while staying on a budget has not always been smooth sailing." Cheap by Choice is about finding what's