Elias Kruse Financial: Davey Boardman
As an Associate Wealth Management Advisor with Elias Kruse Financial, I have the pleasure of meeting with people from all different walks of life, both professionally and personally, and when my profession comes up I often get questions regarding financial literacy, and what steps to take to get started.
The Foundational Building Blocks of Financial Security
Creating a secure financial future can seem like a daunting task, especially given that everyone's financial journey is unique. However, by focusing on a few foundational building blocks, you can establish a strong base for your financial well-being, tailored to your personal needs and future goals. Here’s a refined approach to guiding your financial security:
1. Understand Your Cashflow
Understanding your financial situation begins with a well-structured budget. It's essential to track your income and expenses to ensure your lifestyle does not exceed your income. Consider using the 50/30/20 rule: allocate 50% of your income to needs, 30% to discretionary spending, and 20% to savings. This balanced approach allows you to enjoy life while preparing for the future. Without making it too complicated, there are two options to make a budget healthier, reduce expenses or increase income.
2. Build an Emergency Fund
An adequate emergency fund acts as a safety net, providing you with a financial buffer for unexpected expenses. (water heater or a/c goes out, car repairs, medical emergencies, etc)Aim to save at least 3 to 6 months’ worth of living expenses in an easily accessible bank account. For example, if your monthly expenses are $3,000, your goal should be to save between $9,000 and $18,000.
3. Secure Proper Insurance Coverage
Protecting your loved ones and assets with the right insurance is a crucial step toward financial security. Ensure you have appropriate coverage, including health, home, auto, disability income, life insurance and long-term care, tailored to your specific needs and circumstances. This can make all the difference when it comes to navigating financial events you otherwise might not be able recover from.
4. Eliminate Debt Strategically
Managing debt effectively is key to freeing up resources for future financial growth. Create a plan to tackle debt, whether through the snowball method (paying off the smallest debts first) or the avalanche method (paying off the highest interest debts first). Reducing debt frees up resources for other financial goals. However, having too much of your income going towards servicing debt can be a major stressor, and if you’re not building up savings at the same time then you’re more susceptible to take on additional debt at the next emergency. Seeking a healthy balance is key.
6. Maintain Discipline and Motivation
Staying disciplined and motivated is crucial. Keep your financial goals in view, celebrate your progress, and engage with supportive communities for advice and encouragement.
By focusing on these foundational elements, you can build a robust framework that supports your financial security, no matter your unique starting point or personal goals. Remember, achieving financial security is a marathon, not a sprint, and every step you take brings you closer to a stable financial future.
Davey Boardman uses Elias Kruse Financial as a marketing name for doing business as representatives of Northwestern Mutual. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI and its subsidiaries.
