With a new year comes a new season of your financial life. 2013 was a great year for some, with the stock market posting record numbers multiple times. Dave Szafranski is the President of Edgewater Investment Group in Avon, Ohio and a follower of Christ. He says that if you didn’t take risks in 2013, you missed out. He also adds that the tendency some people have for the coming year is to take larger risks with your finances in order to catch up. But Szafranski cautions:
Don’t overextend yourself in 2014 because it’s probably not going to be as great of a year as 2013. It may be, but we never know…
Instead, Szafranski came up with 5 financial do’s and don’ts for the new year. Read on, or listen to his interview on Faith Radio Mornings below:
1. Get on a budget
Dave says this is the first and most important step in any solid financial plan. But, he says, the tendency for most people is to spend first then save. He strongly encourages folks to do the opposite: saving = planning for the future. Dave also cautions not to let having and keeping a budget lead to marital conflict, or as Dave puts it “[a budget] is not a spousal bludgeoning tool…”. He stresses viewing finances in marriage as a team sport, with both people working together to achieve their financial goals.
2. Give money away
Szafranski says it’s a good thing that most people tithe to their church and give a little extra away, but he stresses that we should always give above and beyond:
If you really want to know how much control money has in your life, try and give some of it away.
He says personally sponsoring missionaries or giving to new charities are good ideas. He also cautions us to make sure we do our homework, because some charities may not use donations in an honorable way. He says there are many ways to ‘check out’ charities, and one that we found is called Charity Navigator, which has great information on hundreds of charities nationwide.
3. Work with a CPA at least once
One of the most overlooked ways to save money is to work with a certified personal accountant. Dave says,
It’s Biblical to pay taxes, but [you shouldn’t] pay more than you should be paying.
He says it’s a matter of maybe paying $150, but potentially saving a whole lot more.
4. Take control of credit cards
Dave says a good rule of thumb with credit cards is to never have more than one or two months of available credit. He says you can avoid financial catastrophes by holding true to that rule. But he also says if a bill comes and you can only afford part of it, you could be in trouble:
The moment you can’t make your payment, don’t use your credit card again until it’s paid off.
Dave says credit cards can be great tools if you control them — not the other way around.
5. Teach your kids about money
Teaching the next generation solid money management skills should be right in line with teaching your kids good moral behavior. Dave says the best way to teach your kids is to actually model good behavior:
That is the most powerful lesson a kid can have about money: ‘well mom and dad do it, maybe I should be thinking that way as well’…give them the freedom to make their own choices.
He says you should also give your kids opportunities to earn money if they aren’t old enough to work or can’t find a job, and then hold them accountable.
Szafranski says it’s all about making the right habits, and sticking to them. You can listen to his interview with Ted and PK on Faith Radio Mornings below: