Pinching Pennies: Advice From a Financial Planner

Adulthood is unavoidable, and along with it comes new, hard responsibilities. One of the most difficult I’ve had to wrap my head around is the matter of finances. I thought as long as I had a savings account budgeting and saving would just come naturally. When my savings dwindled away and expenses rose, I had to pick up a second job just to get by. I even found myself facing the nightmare of having to respond to invitations with, “I’m sorry I can’t…I’m broke.”

One day, just as I was getting comfortable with that dreadful excuse, I finally sat down and decided to figure out where my money had gone. When I realized how much money I was spending on Chick-fil-A alone, I knew I needed some advice. Who better to go to than a financial planner?

Alan Hyatt, a financial planner for Thrivent Financial for the past 27 years, made me realize how dealing with money doesn’t have to be complex. “Finances and money are actually pretty simple, and as cheesy as it sounds, all of the cliches are the truth,” he said with a quick laugh.

“The hard part about being financially sound is it’s not fun. Everyone knows what to do. Everyone knows they shouldn’t build up debt on their credit card, it’s just do you have the discipline,” Hyatt said.

Discipline? In no sense of the word do I have that, but Hyatt reassured me that there are simple steps…and maybe a few more cliches, “Don’t spend more than you make, start a budget and always make your first payment savings – it’s as simple as making an automatic bill pay to your savings account. It’s little simple things,” said Hyatt. With an automatic bill pay, saving money is mindless – it just pulls the money from your paycheck before you have the chance to spend it.

According to Hyatt, priorities are key. “From day one, if you put ten percent of every paycheck away, you will find me in ten years and give me a huge hug,” he said. The biggest problem is taking that first step to make finances a priority. If you make a habit of continually putting away money, you will be extremely grateful for the outcome. According to Hyatt, “humans are creatures of habit. Whether you’re a student or a CEO, whether you make $500 a month or $5,000, you become used to whatever comes in. When life’s hiccups hit, that’s when you’re in trouble.” That’s why making saving a priority, as well as a habit, is the first step.

Hyatt expressed that saving can be both short term and long term. Within those savings plans, priorities come back into play. Hyatt elaborated on really thinking about needs and wants. A short term savings would be ensuring you save the money for the things you need, like textbooks or paying for the water bill on time. Short term savings could also be saving up money for things you want, but it needs to come second to the needs, such as your spring break vacation. Long term saving is a whole new ballgame. This is where you’re putting money aside for your future – oh yes…that scary thought. This can be anything from putting money in an emergency fund, to preparing for long term goals. Maybe for you that’s buying a car, or maybe it’s simply for your plans post college life – you’re going to need to pay those loans off eventually.

Overall, finances are about getting your head in the right mindset. Make saving a habit, pay attention and track where your money is going. Set a budget and find a way to make yourself stick to it. It’s simple – but do you have the discipline?

 

*This article originally appeared in the February 2017 Issue of the Yard*

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