Sleeping through your personal finances is a good recipe for ending up broke and in debt. Not paying attention to money coming in or going out demonstrates a lack of diligence. Proverbs 10:4 says, “Lazy hands make for poverty, but diligent hands bring wealth.”
If you are going to win with money, then there are some things you must pay attention to. When I say “win with money,” I mean being able to do the following without the stress of worrying about debt and paying your bills:
- Give money to charity or to people that need help.
- Save money for retirement and purchases.
- Spend money on activities or items that are fun.
What do you need to do to stay awake through your personal financial situation? If you can pay close attention to the these three areas, then you give yourself a good chance at winning:
- Budget: A budget is a road map for how you spend your money. You need to know what is coming in and what is going out. Not knowing results in overspending and relying on the use of credit cards to pick up the slack.
- Estate planning: This is a fancy term for having a will. It doesn’t matter how much you have. Not having a will can tie up your things in probate with the state that you live in. Do you really want your state deciding who gets your things? A will doesn’t have to be complicated and can be done quite easily. Don’t leave your loved ones without a will!!
- Insurance: It is critical that you know WHAT policies you have and WHAT the coverage amounts are. Not knowing what you have in life, auto, homeowners’s, health, or disability places your net worth at risk. For example, I knew I had sump pump coverage in my homeowner’s insurance but I did not know how much. Two years ago, we had flood damage in our basement and I needed make a claim. It turned out that I had a mere $2000 in coverage to pay for $10,000 in damage. Not smart on my part. After that event, I raised the amount to $10,000. The next year, we had another flood, but this time, the $10,000 coverage prevented out-of-pocket expenses.
There is not too much to this post. It is simple; if you don’t pay attention, you will end up broke.
Question: Are you engaged in your personal finances? If not, which area needs attention?
Follow @robertjacobs01
